In these difficult economic times, just looking at your 401(k) statement can be depressing. So imagine what it must be like to work with these plans for a living! Speaking as a professional pension analyst, it sometimes takes a sense of humor to make it through the day. So here's a little something to cheer up those of you who are familiar with ERISA and its offshoots.
Why Your Check Is Late
Solomon Grundy was faxed on Monday,
Logged on Tuesday,
Set aside on Wednesday,
Buried on Thursday,
Processed on Friday,
Errored out on Saturday,
Forgotten on Sunday.
And this is the payout of Solomon Grundy.
Retirement Gone to the Dogs
Every dog has its day, but providing for that day is no longer as certain as it once was. Rather than spending their golden years lying in the sun and chewing on an old slipper, many dogs are forced to continue barking long past retirement age. In the past, some would move in with their puppies, while others' pups would provide for them to reside at a kennel. However, the increase in neutering has left many dogs without any puppies to care for them in their old age. Many an old hound, having expected to rely on ordinary savings, has discovered too late that there are not nearly enough bones buried in the backyard.
Fortunately, many masters are now looking out for their faithful companions. Owners with large numbers of dogs often establish a defined bonefit plan, but the costs can be prohibitive for smaller masters. Thankfully, these owners can now set up smaller, cheaper plans under Section 401(k9) of the Internal Rovernue Code. The defining feature of these plans is the Bone-or-Deferred Arrangement, in which dogs contribute a portion of their dinners toward retirement, instead of the owners providing the full savings amount.
Unlike traditional defined bonefit plans, 401(k9) plans can allow for dogs to withdraw their savings in the event of a financial hardship. Qualified hardships include: purchase of a primary doghouse; payment of two months tuition for post-secondary obedience school; payment of qualified veterinary expenses; and to prevent being chased out of the yard. However, a 10% penalty tax does apply to these withdrawals if the dog is under age 8.5.
One concern among industry experts is diversification. Polls show that roughly half of all dogs have their entire savings invested in kibbles, rather than higher-return investments such as biscuits or squeaky toys. Another 20% invest exclusively in belly rubs, which could leave them with nothing if their owners develop sore wrists.
Upon being adopted by a new master, dogs face the question of whether the funds should be taken or told to sit. Trainers warn that taking the funds for current use could leave the dog begging in the future. Instead, they admonish canines to "Roll over! Roll over!"
The Plan Administrator's Ballad
We have got a nice plan that's called 401(k).
Our employees can save for the future this way.
But it can get expensive to fund every man,
So we fire them all quick, keep them out if we can.
Well, we haven't made any deposits since June
Of last year, so we should get them in there right soon,
'Cause our plan is quite active--our president, Zeke,
Took a hardship to buy a new boat just last week.
Now, the 5500 is seven years late,
But the DOL's patient; they don't mind the wait.
Every day the participants ask for reports;
Don't the check stubs provide a synopsis of sorts?
There's all sorts of strange rules that I can't figure out,
Like ERISA compliance--what's that all about?
Should our plan be amended to satisfy GUST?
(I guess that we should have a document first.)
We failed ADP, ACP, SAT too,
And the 410(b) gives a percentage of two,
And our plan's been Top-Heavy for seventeen years--
We're supposed to do something about that, I hear.
Now the IRS scheduled an audit for May,
So I'll just place a call to my nice TPA.
Do you think you could get this all ready, my dear?
Oh, come on, that was rude. Please don't scream in my ear!
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