Talk:401(k)

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edit·history·watch·refresh Stock post message.svg To-do list for 401(k):

Here are some tasks you can do:
  • Cleanup: Fix the withdrawal of funds section. Need to consider after tax contributions, pre-1972, 1986-whatever contributions, and the language on the penalty and exceptions needs to be consistent. It's a little contradictory from the first to second paragraphs.
  • Expand: Distribution discussion to cover RMD's for inherited plans, Briefly cover profit sharing provisions.
  • Verify: Add inline references
  • Other: Fiduciary responsibility; Break up the details and technical details sections into topical sections. Possibly (A)Contributions; (B)Administration (the plan document, testing, safe harbors, QNEC, etc); (C)Separate accounts, exclusive benefit; (D) Describe top-heavy 401(k) plans
Priority 4

My link is often reverted. why?[edit]

The links I submitted were for the individual blog entries which are purely informative in nature and have no commercial interests in them whatsoever.
Hence I kindly consider the links in your external links section.
spam://www.brooklyntroy.com/index.php/blog/Using-your-Self-Directed-IRA-to-obtain-non-recourse-loans.html —Preceding unsigned comment added by Sundar77 (talkcontribs) 09:18, 26 October 2009 (UTC)

Looks like it was reverted automatically by a Bot. This is down to external link policy WP:ELNO - links normally to be avoided: "Links to blogs, personal web pages and most fansites, except those written by a recognized authority. (This exception is meant to be very limited; as a minimum standard, recognized authorities always meet Wikipedia's notability criteria for biographies). " Cassandra 73 (talk) 13:03, 26 October 2009 (UTC)
Can i resubmit the links to the blog? Please advice. —Preceding unsigned comment added by 202.129.197.234 (talkcontribs) 05:07, 30 October 2009 (UTC)

Risk[edit]

I plan to put the following 2 paragraphs on the main page:Attorney18 (talk) 15:34, 24 October 2011 (UTC)

Unlike defined benefit ERISA plans or banking institution savings accounts, there is no government insurance for assets held in 401(k) accounts. Plans of sponsors experiencing financial difficulties, sometimes have funding problems. Fortunately, the bankruptcy laws give a high priority to sponsor funding liability. In moving between jobs, this should be a consideration by a plan participant in whether to leave assets in the old plan or roll over the assets to a new employer plan. Attorney18 (talk) 10:38, 22 October 2011 (UTC)

Recent court decisions have vastly increased the risk associated with holding assets in company sponsored defined contribution accounts. Prior to these court decisions, the contributions made into company sponsored defined contribution accounts could not be reduced due to the anti-cutback rule of ERISA §204(g)2, which prohibits the reduction of accrued benefits or the imposition of greater restrictions on the receipt of accrued benefits. However, since 2007 in the case: Register v. PNC Fin.Servs. Grp., Inc., 477F.3rd 56 (3d Cir. 2007), the courts have held that plan sponsors may take back prior contributions to defined contribution accounts. As the plan sponsor owns all defined contribution accounts until the moment of disbursement, the courts allow the sponsors to take back contributions, not distinguishing between the sponsor attributable contributions and the employee attributable contributions. In the June 2011 case: Engers v. AT&T, 10-2752 (3d Cir. 2011), that also relied on the case: Jensen v. Solvay Chemicals, Inc., 625 F.3rd 641 (10th Cir. 2010) the court legitimized the action of a large, continually profitable, national employer that instituted a policy to take back all the contributions made to employees’ defined contribution accounts. In the 2011 Engers case, the employer, AT&T, felt it had over-compensated its older workers in prior years and had instituted a policy of taking back the contributions to such employees’ defined contribution accounts at the moment of each employee’s retirement. As this policy would be upsetting to its workers, the company publicized its continued annual contributions to employee defined contribution accounts, including providing periodic, detailed bookkeeping statements, without informing the employee it was also taking back all the contributions it was making at the time an employee requested disbursement. Some employees had 8 years of contributions, the entire assets of their defined contribution account, taken back. The courts condoned AT&T’s actions. Participants in pension plans having defined contribution accounts may wish to consider whether they should withdraw company contributions as soon as received, even though suffering penalties, rather than running the risk of having the sponsor take back all account assets at the time the employee requests disbursement.Attorney18 (talk) 15:34, 24 October 2011 (UTC)

A few comments[edit]

The article is rather hard to read and could be improved. A few comments are necessary.

1. The last paragraph in the "Withdrawal of funds" is ugly and needs to be re-written. Expressions like "Some will argue" and words like "you" and "your" should be avoided.

2. In the RMD section I read "Other than the exception for continuing to work after age 70½ differs from the rules for IRA minimum distributions. The same penalty applies to the failure to make the minimum distribution. The penalty is 50% of the amount that should have been distributed, one of the most severe penalties the IRS applies." First of all, the first sentence needs to be fixed. Secondly, no penalty is mentioned before "The same penalty applies".

3. "That is for plans whose first day of the plan year is in calendar year 2007, we look to each employee's prior year gross compensation (also known as 'Medicare wages') and those who earned more than $100,000 are HCEs. Most testing done now in 2009 will be for the 2008 plan year and compare employees' 2007 plan year gross compensation to the $100,000 threshold for 2007 to determine who is HCE and who is a NHCE." "we" should not be used. "now" is unnecessary.

4. "Note: an unincorporated business person is subject to slightly different calculation." Is it proper to start a sentence like this? I don't think so.

ICE77 (talk) 05:19, 23 July 2012 (UTC)