Company 401k Plans
- mdorsey
- treasur2
- rasputin
- mdorsey
- mdorsey
- Rande
- SteveT
- Rande
- SteveT
- JenL_2
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» mdorsey - A warning to all
http://www.msnbc.com/news/662061.asp?0si...Employees sue Enron over 401(k)
Suits say company hid risks of its stock, prevented
workers from selling while shares plummeted
By Theo Francis and Ellen Schultz
THE WALL STREET JOURNAL
Nov. 23 — Enron Corp., the embattled Houston energy and trading company, has been sued by members of its employee-retirement plan, which has suffered losses because of Enron’s plummeting stock price.
-- posted by mdorsey
» treasur2 - Limit my contribution
What is the motivation for a employer to limit my contribution to anything other than the max of 25% of my compensation (or $35k)or 100% next year (or $40k). Another words, why do they care how much I put in. My suspicion is there's some kind of regulation that prevents me from putting more in. I just don't know what it is, and my benefits department just sends me to a generic website with superficial information.-- posted by treasur2
» rasputin - Re: Limit my contribution
In response to message posted by treasur2:Hey treas,
I should know more about this...but, there's something about limits placed on highly compensated employees when you're in a company where there's a significant gap between the high earners and the rank and file. I think there's something about the need for a high level of participation by the rank and file and that this may determine how much you can contribute. In addition to this, there are regulations as far as the maximum you can contribute. If that ain't enough to mull over, these maximum amounts are going up over the next several years for employees over 50 years old to allow them to "catch up" in preparing for retirement. Never fear, treas...there will be others on this board who are more learned than I who will provide more info.
-- posted by rasputin
» mdorsey - Here is a bad trend
General Motors to cut 401(k) matchesBenefits trimmed for second time since March
By Cecily Fraser, CBS.MarketWatch.com
Last Update: 4:48 PM ET Dec. 13, 2001
DETROIT (CBS.MW) -- General Motors Corp. plans to cut 401(k) matching contributions for salaried employees by 66 percent, the company told CBS.MarketWatch.com on Thursday
Effective Jan. 1, GM (GM: news, chart, profile) workers will collect 20 cents from the automaker for each dollar they contribute up to the first 6 percent of their base salary.
The move follows a plan adjustment made in March when GM trimmed the match to 60 cents, down from 80 cents, as part of a cost-structure overhaul to cope with the economic slump.
-- posted by mdorsey
» mdorsey - There has to be a lesson here somewhere.
HOUSTON (AP) - Enron Corp. said Friday it froze employee retirement accounts packed with its stock while shares plummeted in October and November as part of a routine switch of administrators for the 401(k) program.The embattled former energy giant, faced with more than 60 401(k)-related lawsuits in state and federal courts, issued a statement Friday that said employees had plenty of notice of the 10-day freeze and that it was unrelated to the company's swift downfall.
The company said employees were notified by mail Oct. 4 that accounts would be frozen from Oct. 29 through Nov. 12. Enron said several reminders were sent via the company's internal e-mail system before Oct. 29 as well.
http://dailynews.yahoo.com/h/ap/20011214...
I heard of these freeze periods before. In fact we have talked about it on the old BB site. The problem at that time was what if BB gave a buy or sell signal during a freeze period in your 401K. That would be a small problem compared to the company going under during a freeze.
What can you do? Can you switch to MM in your 401K before the freeze and then switch back after? Some of you out there must have considered some safe haven during such times. What kind of rules would there be against such actions? Would you have to just keep your company stock allocation at a low percent at all times or what?
-- posted by mdorsey
» Rande - Re: There has to be a lesson here somewhere.
In response to message posted by mdorsey:A complete non-issue for those who take a total portfolio approach and are broadly diversified within an appropriate long-term asset allocation they can live with. In fact, trading restricitions in 401k plans can be a blessing in disguise for those who are weak and vulnerable to the latest "do something immediately" proclamations from their favorite financial media guru. Specific stock exposure is another matter, one which a broadly diversified total portfolio approach makes moot.
-- posted by Rande
» SteveT - Re: There has to be a lesson here somewhere.
In response to message posted by mdorsey:The plan I am in has gone through "upgrades" and been frozen too. They always announce ahead of time and say how long the period will be. Only problem is they almost never have it done on time. I have seen them claim it will be down for 1 week and saw it stretch to 6 weeks.
Best protection. Allocation and diversification. Our course I am familiar with other plans that require matching contributions to be only in company stock and some have holding periods of 5 years or more. Not much you can do in some cases, so do the best you can. Not a big deal unless they change the rules on you and you already have say 10% of you portfolio in company stock.
I don't know that I would go so far as to drastically switch to a money market fund for a few days to "protect" from something that may never happen. If you follow the companies you own and work for I can't imagine to big of a surprise in a week or so. On the other hand if one is over weighted and does not closely follow what is going on wouldn't you think they would have responsibilityblity?
-- posted by SteveT
» JenL_2 - Re: There has to be a lesson here somewhere.
In response to message posted by mdorsey:Mike you asked...
What can you do? Can you switch to MM in your 401K before the freeze and then switch back after? Some of you out there must have considered some safe haven during such times. What kind of rules would there be against such actions? Would you have to just keep your company stock allocation at a low percent at all times or what?
Agree with Rande's comments - if you have a proper asset allocation and not too heavily weighted in your company stock it's a non-issue. Our 401(k) accounts have had several freeze periods while the companies changed 401(k) plans, and in every instance we were given plenty of notice and could choose to go 100% into money market if we wanted to.....Jen
-- posted by JenL_2
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