Compliance November 10, 2002

IRS Offers Some More Help On Catch-Ups

October 23, 2001 (PLANSPONSOR.com) ? The Internal Revenue Service (IRS) has issued proposed regulations designed to assist plan sponsors with the implementation of the new ?catch-up? contributions.

Reported by

Those contributions were provided for under the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) to allow workers aged 50 and above to set aside funds for retirement above and beyond other plan and regulatory limits ? if the plan has been amended to provide for the contributions, and if the participant is otherwise eligible to make contributions under the plan.

Catching Up

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Beginning in 2002, employees age 50 and older, including those who turn 50 before the end of the year, are allowed to make additional “catch-up” elective deferrals of up to $1,000 to 401(k), 403(b), SEP, SIMPLE, or 457 plans. Those contributions are not subject to limits such as those in Section 415, nor are they subject to most nondiscrimination tests, including the average deferral percentage test. They can be made even if the individual has capped out on other contributory limits.

An employer may match these catch-up contributions-but those matching contributions will be subject to the normal rules. However, none of this will be possible until the plan document itself is amended to allow for this new kind of contribution.

A Bit of Clarity

The proposed regulations attempt to address some of the particular concerns associated with implementing the new contributions.

For plan sponsors worried about how such contributions will be designated, the regulations appear to assume that catch-up contributions will be those made above and beyond other limits ? those imposed by the plan itself, statutory limits or the limits imposed by the application of nondiscrimination tests, such as the ADP test.

That determination can be made after a plan has conducted its nondiscrimination tests. The regulations also acknowledge that those determinations can be made as of the last day of the relevant year for non-calendar year plans.

For purposes of the average deferral percentage (ADP) test, catch-up contributions are ignored, with those amounts subtracted from the participant?s elective deferrals before calculating the deferral percentage.

Contributions that would otherwise

Administration November 9, 2002

Companies Willing to Fund IT Security Efforts

September 11, 2002 (PLANSPONSOR.com) - Technology security seems to be a growing concern among companies these days - one at which they're apparently willing to throw a good bit of money.

Reported by

Fred Schneyer

According to a survey by Vista Research and Harris Interactive, more than half the companies polled had upped the amount they spend on keeping their IT operation secure – in many cases taken from other parts of the company’s overall tech budgets.

Nearly half of the firms said they plan on repeating the budgeting for the coming year.

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Of those companies intending to spend significantly more this year, four in 10 said they would dip into other information technology budgets to do so, according to a CNET news report about the poll.

IT Security Vendors

The report found that security decision makers are currently using IT security products from mainstream companies such as Symantec, Microsoft and Cisco, rather than security-market stalwarts such as Check Point Software and Internet Security Systems, CNET said.

Specifically:

half of the participants cited Symantec as one of the companies they relied on
47% said Cisco was part of their buying mix
42% said Microsoft on their vendor list.
a scant 12% mentioned Check Point Software
7% said Watchguard
a tiny 4% listed ISS.

Some 12% of the companies polled reported having a significant security breach or major fraud in the past year.

The report summarized the results of a survey of nearly 300 high-level information technology managers.