Conference 7.286::digital

RE: .0

You're Making too much money/saving too much. So the goverment won't
let you save so much. So that the rest of us that don't make so much
will FEEL BETTER.  ;o)

    Re: .0
    
    There's some fed reg that says the more "highly compensated"
    employees can't save a disproporationate (sp?) amount compared
    to the less highly compensated employees in the company.  So
    the former get their contributions chopped down each year
    things start to get out of balance.
    

    
    Kind of sounds like communism. Make everybody equal, especially if it
    can be equally poor.
    
    I work for money, how much I save should be *my* business, not the
    government's. Makes me a Gingrich fan for sure...
    
    		the Greyhawk

    "From each according to his abilities, to each according to their
    needs."
    
    It's so sad that Marx and company (not Groucho, by the way) didn't get
    to hang around long enough to see the fruits of their labors blossom in
    the American taxation system.  They'd be proud of the "redistribution of
    wealth".
    
    Watch this space for "Campaign News".  You're gonna see the tax system
    become *the* major campaign issue, IMHO, with discussions on flat tax,
    sales tax, etc.  Now, if they can only deliver...
    
    								Tex

>                     how much I save should be *my* business, not the
>   government's.

You can save whatever you want.  Just don't expect a tax subsidy
from the rest of us unless it serves some broader public interest.

- Peter    

    They also add stock proceeds in figuring out your compensation.
    So, without getting any raises for years, you can still mysteriously
    become "highly compensated".  By the way, no portion of the the stock
    sales can be put into 401(K).

    Does anyone have the actual IRS wording to verify that claim?

    - Vikas

>    Does anyone have the actual IRS wording to verify that claim?
    
    I think it's "Badges?  We don't *need* no stinkin' *badges*!!" :^]
    
    Wording changes yearly.  Interpretation of wording often changes on a
    case by case basis.  Implementation of interpretation changes depending
    upon how good your attorney is and who your congressperson is.
    
    So wording's a good place to start (check with your local accountant),
    but your mileage may vary on the rest.

    I received my "explanatory letter" the other day. Now I have to call
    Benefits Express to figure out exactly what they are talking about
    since the letter made absolutely no sense at all. That's what happens
    when they use a form letter for these things!
    
    Debbie
    

    
    -1 there's a $$$cap on the 401K contribution. I got the letter too,
    and it would have helped if it included what that number is -
    it's actually an absolute number, not tied to gross salary or
     etc. My letter said I can only contribute 8% not 12%, which may not
    be entirely true. I mean if you take that $$cap/52/weekly gross salary,
    that would give you your %contribution.
    
    But one thing bothers about this: It appears that my cut-off occurs
    shortly after Digital started matching. Does it mean then that with
    my contribution stoppage, Digital's matching will also stop? Since 
    the matching is NOT retroactive, does it mean that I am losing out 
    a company benefit from now till 1/1/96?
    
    

    
    	Good question. And probably...
    
    
    		the Greyhawk

    I have the same question, and another.
    
    	I put in 8%. If I'm caped at 8%, do I loose DIGITAL matching funds?
    
    Second, I'm sure I read something somewhere that stated digital had a 
    plan to compensate individual that hit the limit. Of course, I can't
    find it right now and what I remember of it tends to make me think
    it was for employees that are "HIGHLY compensated".
    
    jim
    

    re: .11
    
    Digital matches funds at 1/3 up to a personal contribution of 6%
    (thus a max corporate match of 2%).  So if you contribute 6% or
    more, you will get the maximum match.
    
    The only problem comes if you hit the dollar maximum during the
    year and your contributions therefore stop.  In this case, the
    matching will probably also be cut off.  But I'm not sure on this
    point.
    
    Rich

RE: .9
    
>    But one thing bothers about this: It appears that my cut-off occurs
>    shortly after Digital started matching. Does it mean then that with
>    my contribution stoppage, Digital's matching will also stop? Since 
>    the matching is NOT retroactive, does it mean that I am losing out 
>    a company benefit from now till 1/1/96?
    
What I did when I became aware of this problem was to reduce my SAVE plan
to 6%, which then allows the full benefit of Digital's matching 1/3 amount.

In effect, I got a taxable 2% raise.  I am then free to take this amount and
put it somewhere else (retirement, kid's college fund, whatever).

It ain't much, but it is something...

And before we start getting all huffy at Digital, keep in mind this is the
decision of the U.S. government and the IRS, and that Digital management
had absolutely no choice in the matter.  The IRS set policies that make it
so that I "have been designated as a highly compensated employee", not 
Digital!

Boy, I wish I could tell the bank that I am "highly compensated".  They see
my check every week, and they would probably laugh as hard as I did :-)

-- Ken Moreau

    I called Benefits Express and asked, and for this first year only there
    is a "restoration plan" that will kick in some amount of matching for
    those people caught in the I contributed too much too soon trap.  They
    sent letters about it to the people that they guessed would be in that
    situation (what a system - they can't even get good news distributed
    properly.)
    

    Ok, so my question is....I contribute 8% now. I thought that I would
    still get some percentage kicked in by Digital. Is this letter telling
    me Digital won't kick anything in for me at all or that at some point
    during the year both my and Digital's contribution will stop. (I'd
    check my paystub to see if anything changed except that due to a typo,
    by cost center got changed to one that is in New Jersey and I'm in
    Mass.!, so no paystubs for awhile).
    
    Debbie
    

You would be contributing too much if you make (9.248/8)*100K per year. 
You will then hit the hard limit set by IRS for the dollar contribution
max.  I have no fear of getting hit by *that* limit :-(

I was told by Benefit Express that regardless of your own contribution
[be it 8%, 12% or 6%] Digital does contribute (upto) 2% of your salary
to the 401K plan.  He was able to tell me the dollar amount Digital
contributed during the last 4 weeks.

If so, why would somebody want to voluntarily cut down their contribution
from allowd max [8% or 12% based on your *total* W2 1-Jun-94 thru 30-Jul-95
compensation] to 6%?

Digital payroll send your 1-Jun-94 thru 30-Jul-95 total compensation to 
SAVE administrators.  That included almost everything, including tution
re-imbersement, moving expenses, profit from stock sales, comission (?),
bonus (??).  This means that even though your  weekly_pay * 52 is below the
the highly compensation limit, you could be still classified as  highly
compnesated employee for the administration of the SAVE plan.  This will
result in changing your max from 12% to 8% for the *entire* amount.  They
could have designed the system and the magic cut-off line with sliding
scale but didn't bother.

Mc = Magic Cutoff Point
Wp = Weekly pay
Tc = Total compensation
Sv = Allowed Save contribution in dollar amount

Their algorithm

if (Tc > Mc)
	Sv = 0.08 * Wp
else
	Sv = 0.12 * Wp

"Fairer" algorithm [might need different Mc to satisfy IRS criterion]

if (Tc > Mc)
        Sv = (0.12 * Mc/52) + 0.08 * (Wp - Mc/52)
else
	Sv = 0.12 * Wp

Thanks,
- Vikas
                                               

Employees making over 115,600 per year will hit the dollar contribution limit.
If I made that kind of money, I wouldn't be complaining :-)

I was also told that the Digital contribution was not counted in
determining your contribution rate i.e. 8% or 12% limit only applies to
your *own* contribution, NOT the matching contribution.

I was also told that the recalculations will be done in Jul 96.  Was the
initial calculation done in Mar 95 or was it done in Jul 94 when the new
SAVE plan went in effect?

The Digital cutoff limit for 8% vs 12% is $66000.  IRS Dollar limit is
$9248.   Here are the numbers

	12% * 65999.99 =   7919.99
	14% * 65999.99 =   9239.99

	8% *  66000.01     =  5280.00
       10% *  66000.01     =  6600.00
       12% *  66000.01    =  Core Dumped [can't do 12%]

        8% * 115600	=  9248.00
       10% * 115600	=  ?? I don't know   

- Vikas

    If "profit from sale of stock" gets added in to put you into the "highly
    compensated" category, will selling some of that $100+ stock from a few
    years ago get reported to them as a loss, thus enabling one to
    contribute more?
    
    Deb

I don't think so.  Your W2 does not get reduced by the stock loss.

    The limit on SAVE contributions is yet another example of the hypocrisy
    of US political leaders ( particularly Democrats ).
    
    They constantly bemoan the fact that Americans do not save enough in
    comparison to Europeans or the Japanese, but they are forever
    arranging laws so that they penalize savings.
    
    BTW, you may ultimately be lucky that you don't build up to much
    savings within tax-shletered retirement plans. I am seeing more and
    more articles in the business press about how even middle class baby
    boomers may get burned by another socialistic trick that the
    politicians have built into the retirement savings laws. Namely, the
    tax penalty you will face if you withdraw more than $150 K from a
    retirement account in any year after you turn 59 and one-half.

    
    Any large amount of cash sitting out there will attract the attention
    of politicians in the same manner as blood in shark-infested water.
    
    Right now there's tons of rules to ensure we keep this money in there
    for years to come.  This is analogous, IMHO, to placing meat in the
    freezer for a future dinner.
    
    								Tex

    re .21
    
    Truer words were never spoken.  Tex, you're another Thomas
    Jefferson.  Wasn't it he who said, "No man's life, liberty, or
    property is safe while the legislature is in session."  Or was
    that George Washington...?
    
    BTW, Tex, is this why you like the Caribbean so much?  Maybe
    "offshore" is the best place for retirement funds?  <sigh>
    
    \ken

    re .20
    
    I agree!! It burns me that I'm being penalized for saving
    and weaning off the SS system, welfare etc!
    
    Seems to me:
    * Dividends should be non-taxable since my principle is already
    taxed! This is double taxation!
    * Any savings towards retirement via IRAs and 401K, 403K(?) should
    be encouraged, and incentives should be added not taken away, as
    when the pre-tax IRA was yanked.
    * We should be encouraged and rewarded to being healthy espec.
    at and during retirement. Somehow, I'd like to see this tied with
    savings for retirement. It seems to me seniors spend an inordinate
    amount of $$ on drugs, MD's etc which probably could be prevented
    if they are encouraged to be healthy all their lives.
                        
    Before noters flame me about how the rich will get richer with
    these policies in place, let me remind you that the bulk of us
    are so-called middle class. We are the ones that HAVE TO take care 
    of ourselves without govt help, but today we are the ones being taxed
    up to the ying-yang!
    

    Please, this isn't SOAPBOX.  Please confine the discussion to charter
    of this conference.
    
    Thanks,
    
    Bob - Co-moderator DIGITAL

    
    hey, calling B. Expr makes me even more curious....
    
    BTW, the formula for "highly-compensated" is the sum of the gross
    salary + medical premium acct + profits from stock sale. (I have NO
    idea what medical premium account is, BE didn't know).
    
    For the sake of my argument below let assume that the total salary
    indeed is $66000 (no extras thrown in). 
    
    
    Now based on $66K limit, a 12% contribution will be $7920. Why not 
    allow the employee to continue contributing 12% until that $7920 is
    met? (The IRS allows one to contribute until its ~$9200 is met)
    By knocking the contribution to 8% from now till 12/31/95, the employee
    would probably be (on a case by case basis) shortchanged by Digital 
    (not ironically, the IRS) if his/her TOTAL YTD contribution 
    is than the $7920 limit.
    
    If your situation fits the scenario above, I would encourage you to
    call Payroll as a place to start as BE recommends.
    
    
    
     
    
    

re: .25

    >(I have NO idea what medical premium account is, BE didn't know).

I've heard that some people get better medical benefits than the rest of 
us.

Ray

    
    I do not believe that it is legally up to Digital's payroll to enforce 
    each individuals maximum contribution to the 401K.  
    
    Having worked for another company recently, that company made it 
    abundantly clear that it was up to the individual to make sure 
    they weren't contributing over the magic amount.  So, those who 
    were in danger of overcontributing took the time to watch those 
    figures and modify their contribution to the 401k when necessary.
    
    After all, if you max out your 401K contribution in September, who is
    to say you might leave retire or take leave without pay for the rest 
    of the year?
    
    Mary Jo 

    OK, Bob, I'll get back on track but...I plan to digress.. :^]
    
    The reason for the "highly compensated" law, which I believe was passed
    as part of the TEFRA legislation, is because this little gig was
    originally set up for rich politicians, lawyers, and the ilk (however
    it became a tad too popular, as we'll see shortly).  Anyone thinking it
    was for their little middle-class fannies should take another peek.  In
    any event, money built up, politicians smelled it, and now you don't
    get to keep it.  Nanny-nanny boo-boo.
    
    Anyway, a legal office employing three people; the lawyer who's making a
    bundle, a $12k/yr secretary, and a $24k/yr paralegal, would have this
    great plan set up that allowed large chunks to avoid taxes.  As simple
    percentages, if you could shelter 20%, the net result was that the
    $12k/yr secretary could possibly shelter a total of $2400 after he/she
    had payed rent, food, car, insurance, clothing, the pool boy, etc.  The
    paralegal would realistically shelter a coupla bucks, if lucky.  The
    lawyer would sock away a nice $120,000, have his medical completely
    paid for, borrow from the amount for his Carribean vacation home, etc.
    
    And in response to a previous note on the Caribbean...
    
    Contrasting Carribean banking to American banking is the difference
    between ordering dinner at a Russian restaurant and ordering dinner at
    Chili's.  Doctors especially, who are prone to malpractice, sock away a
    ton of moola in the various islands, all who are pleased to receive and
    administer it.  In addition, their reserve rates are very high,
    virtually ensuring safety the way Switzerland's Canton system does.  US
    reserve rates are only a 1/3 of the international standard, last I
    checked, and due to "banking reform" that can consist of goodwill
    entries on the balance sheet...which you can't use for groceries.
    
    Not-so-coincidentally, the now-defunct Bank of the House of
    Representatives (motto: "money by the bushel?  No problem!") was the
    only US bank exempt from banking regulation...wire a million to the
    Bahamas?  No problem, no record, it's *done*, Senator!  Oliver North
    did *not* use traveler's checks, kids.
    
    Here in the center of the Great Bank Collapse of the Eighties, I
    finally withdraw *all* funds, as my banks had a tendency to disappear
    over the weekend and I was gettin' pretty damn nervous!  *Every* bank I
    *ever* used is now gone, as well as all S&Ls I ever even drove by!  I'm
    *not* making this up.  I kept only my account at a well-established
    credit union open with the minimum balance.
    
    "The Government giveth, and the Government taketh away", however you can
    always count on the Government to giveth unto others they deem worthy
    using your simoleons after they've taken it away from you.
    
    Ain't no free lunch, and the NEA, Israel, the UN, Saudia Arabia and Kuwait,
    the Sugar Cane and Angora Wool subsidies, fact-finding missions to
    Bermuda (can't be too many hidden facts left there, I wouldn't think),
    $300k studies on "why kids fall off their bikes" (answer: "they lose
    their balance"...serious), farm subsidies to ConAgra and Arab sheiks,
    debt service equal to 25% of the Federal budget, the OJ Simpson trial,
    the US Helium Reserve, non-super-non-colliding-conductor, and Somalia,
    just to name a *very* few require a *lot* of money...yours and mine.
    
    Watch this space for election '96...you'll be hearing very serious
    proposals on flat tax and sales tax to replace the income tax.  Anyone
    that thinks it don't work, come on down to Texas.  We do *not* have a
    state income tax and we're doin' just fine, thank yew!
    
    								Tex
    
    (Did I do OK, Bob?)

    
    	You did OK, Tex...
    
    
    	I like to compliment that with notice that IRAs are only funded by
    working; so stay at homes are severly penalized.
    
    	But nonetheless, your 401 (k) is the only real vehicle us peasents
    have to be able to have a retirement worth having. So use it, folks.
    
    
    		the Greyhawk

    		Swierkowski, you're diggin' too far! :^]
    
    Mama allus said, "Don't talk about your money or your wife".  She also
    said, "Sheeew!  You get hit by a polecat?!?  Outta mah kitchen!  OUT!"
    
    (But I think that was an isolated incidence and I'm not sure it's
    relevant here.)
    
    								Tex

>    Watch this space for election '96...you'll be hearing very serious
>    proposals on flat tax and sales tax to replace the income tax.  Anyone
>    that thinks it don't work, come on down to Texas.  We do *not* have a
>    state income tax and we're doin' just fine, thank yew!

	This is the ONLY thing that makes sense.  Somehow we've become a 
nation that depends on the IRS to tell us what to save and what to spend.
If it's tax-deductible, we interpret that to mean it's what we "can" do.
If the government takes our money for Social Security, we "can't" save for
retirement.  If we can't use a tax-deferred 401K, we "can't" save for our 
retirement.  We're "penalized" for saving or investing (taxable interest/
dividends).  The tax-deferred limits in 401Ks and IRAs set a ceiling for tax 
subsidies.  In my ever so humble opinion, we desperately need a plain and 
simple tax system.  Then maybe we could go about the business of making 
decisions based on our financial needs rather than on what's tax-smart.

Sorry for the further digression - sort of.

			SQ

    Re: .32
    
    Hear, hear.  I knew when I started avoiding certain investments because
    they would make my tax return more complicated, that things were badly
    broken.
    

    
    
    .32 Susan -
    
    	I couldn't agree with you more about re-vamping the entire
    	tax system, but since any [good] reform will not happen during
    	our lifetime, one gotta do what one gotta do!!
    
    	And grewhawk is absolutely right --- this is about the ONLY
    	means for us peasants to determine our own retirement destiny,
    	which is why I've used it since its inception, ie the old
    	IRA way.
                     
    

	Awww - Tex, I was just funnin' ya.

			SQ

    Re: .23 
     >>>   I agree!! It burns me that I'm being penalized for saving
     >>>   and weaning off the SS system, welfare etc!
    
     >>>   Seems to me:
     >>>   * Dividends should be non-taxable since my principle is already
     >>>   taxed! This is double taxation!
        
    
    How do you figure that? The SAVE money is PRE-tax, so you aren't paying
    any tax on it now. Contributing to an IRA is taxed if you're earning
    over a certain amount or have a company-funded retirement plan (like we
    do at Digital), so I can see your point about that. But I don't
    contribute much to my IRA anymore since it isn't tax deductible (at
    least the earnings are tax deferred).
    
    Debbie
    

    
    
    .36 debbie -
    	sorry for not being clear...
    	yes, the 401k is PRE-Tax savings and yes the current IRA is NOT.
    	The only redeeming value left for IRA is the fact your interest
    	earned will not be taxable until withdrawal, but the principle
    	is your after-tax dollars.
    
    	I was refering to the mundane savings investment (not 401K or
    	IRA) where the principle that is put away for savings is already
    	taxed, and then when the measly dividends/interests arrive, that
    	again is taxed. That is what I double taxation.
    

>         I was refering to the mundane savings investment (not 401K or
>         IRA) where the principle that is put away for savings is already
>         taxed, and then when the measly dividends/interests arrive, that
>         again is taxed. That is what I double taxation.

I don't get your point here. The only sort of "dividend" you might legitimately 
argue is double-taxed is a mutual fund dividend, since that dividend directly 
diminishes the value of your shares. And that argument would have a chance only if 
the value of your shares otherwise remained constant or declined year-to-year (in 
which case, you're probably not a particularly savvy investor and wow! have I got 
a deal for you!). Unfortunately, if you did try to make that argument, any 
competent tax advisor would point out that 1) based on the activities of the mf 
mgmt, income was generated and passed along to you and/or taxes were incurred and 
passed along to you, and 2) them's the rules so it doesn't matter whether you're 
right or wrong.

Any type of savings account: principal remains constant (unless you want to throw 
inflation into the mix), interest (income) is generated, that additional income is 
taxed. The principal derives from post-tax dollars and is not taxed again (except 
for the "inflation tax").

Stocks: company pays a per-share dividend (income), that additional income is 
taxed. You're not taxed on the value of the shares you own (until you sell them).

     .38
    
    	geez guys.... excuse me... I know all that...
    	I was expressing a wish that I know will not happen in
    	my lifetime and that is, for my investment interests
    	to be non-taxable, and I mean mundane "liquid" investments
    	(actually the term investment does not apply, really) like
    	putting away 6 mths emergency funds in the DCU.
    
    	And in that wish list ( a whine list, whatever), I did rule out 
    	Tax-free investments which although is good (depending on 
    	your situation) may not be as liquid or as inexpensive (loading,
    	management fees etc) as the DCU savings.
    
    	and before all the investment pundits in here get bent out
    	of shape, the gist of the dialogue is about "encouraging
    	people to save" so in my pedestrian mind, if there I am taxed less
    	on my savings, lo and behold, I'll save more.

    What Wannoor's askin' ain't even out of the question, it's reasonable,
    and currently legislation is pushing that way.  It also works in other
    countries *and right here in the good old USA*!  The problem is, most
    of us have grown to accept the status quo.  I remember thinking the Nam
    was more of an institution than an insurrection...but that didn't mean
    we should've kept it going.  Same with the Federal Income Tax.
    
    We don't have a State Income Tax in Texas, we have a sales tax.  Local
    schools and communities are funded through a property tax (still lower
    than almost all other states).  The only other dipping I get out of my
    pocket is the Federal government, because it's dipped out as I buy my
    goods.  In Texas, we even tax the drug dealers...every time they buy
    something.  On the other hand, I firmly believe *no one* fully
    understands the 20,000 page tax code, it achieves less than 90%
    compliance, the big boys cheat it, the black marketers cheat it, we
    fight like hell to deal with it, and now...it's time to toss it.
    
    Here's what a state sales tax, instead of a state income tax, does for
    us:
    
    * State Tax preparation time: zero.  (by the way...sales tax is already
    collected in almost every state, thus the infrastructure is there for
    the Fed to use!)
    
    * Business reporting on my income: zero.  Or it would be, if not for the
    Fed.  Texas hasn't a bit of interest in my cashflow.
    
    * Huge government savings.  No one gets audited, publishes tax forms,
    clogs the mails with more forms, etc.  Here in Texas, people that don't
    pay the state sales tax they collected get free room and board for
    extended periods as a reward. :^]  Sorry, I was just thinking of a
    bedraggled man in a dirty suit standing by the road with a sign that
    says "Will Audit For Food".
    
    * Business returns to the business at hand...making money.
    
    Big Business are some of the primary movers pushing for a totally new
    and workable taxation system, due to the effect on their bottom line. 
    Us little guys, trying to salt away for a rainy day, have the same
    concerns.  It's a strange alliance with a common enemy.
    
    Once again, I think this'll be the biggest election year issue I can
    remember since Gary Hart went boating.  If Bill Archer gets this
    through, ah'm gonna name mah next three kids "Bill"...even if they're
    girls.
    
    								Tex

    
    	Boy, am I with you, Tex.
    
    	In illinois we get taxed on everything we consume to the 7.5%
    level, have a state 3% income tax PLUS taxes on interest income
    earned within the state as well as federal interest from bonds, etc.
    (do these guys *know* how to spend money, or what?) Property taxes
    are among the highest in the US (about 3% of market value, and adjusted
    each YEAR - regardless), our taxes on telephone calls and utility usage
    have the distinction of being the highest in the US, and top it off
    we get levied another 2.5% gasoline tax as a "surcharge" in Cook
    County.
    
    	And the Democrats in Illinois wonder why everybody who works for a
    living hates 'em.
    
    	Hell, I'm surprised...
    
    
    		the Greyhawk

If you really want to continue the rat-hole...

    If you tax working income, but not savings, you encourge all sorts
    of games.  In general, you want to tax entire things (e.g. all
    income, regardless of source) equally, otherwise you start having
    potentially nasty economic consequences.  (Note that investment
    income already is taxed at a lower rate than "real work" -
    no soc. security or medicare tax.  Things like distort ecomonic
    decisions, for example, in married couples where one income
    reaches the yearly soc. security limit, but the other doesn't
    have more of an incentive to increase the first income - increasing
    income disparity.)

    The "negative income tax" (flat or not - doesn't matter) actually
    makes a lot of sense toward fixing various problems.  (Basically,
    you have a "zero level" that corresponds to "subsistence level" -
    below that people get subsidized [replaces welfare] - but NEVER
    wind up in the situation like exists today where earning a dollar
    can lose more than a dollar in benefits - which is exactly
    equivalent to a marginal tax rate in excess of 100%.)

    Another interesting thing would be for any family (married filing
    jointly + dependents) you simply figure the taxes by using
    the *same* tax table as single, but divide the income and deductions
    by the number of people first.  e.g. $45K + $35K + 0 + 0 for
    a family of four, with $10K of total deductions would be taxed
    *exactly the same* as if there were 4 people that each made
    $20K with $5K of deductions.  This "averaging" would one
    of government's support of the family unit and the next generation.

In general, I would agree that government is on the overly large side
at the moment - government is a loosely [elections] regulated monopoly.
Monopolies and other "mono-culture" types of environments are inherently
dangerous because of the disproportional power they have.

On the other hand, the government DOES have a role in protecting people
from violations of their rights.  (And, I would include in that things
like [strongly] protecting the environment for future generations, which
places me at odds with a lot of conservatives...)

Anyway - this sounds like Soapbox material...

    
    
    	Question - somewhat related - when Digital began the 'matching
    	funds' program of up to 2% contributed to our SAVE accounts,
    	where would you think that it would be noted?  On our weekly pay
    	stubs, on the quarterly statements, other???
    
    	There is no reference to this on my pay stub, and I wonder if
    	that means that Digital isn't matching my contribution, or if it
    	is noted elsewhere.
    
    	Anybody know?
    
    	Thanks,
    	Diane

    on the quarterly SAVE statement.

    Diane, you can confirm that Digital's matching contributions are being
    made to your account by checking the difference in your balance on a
    Wednesday (call BE on Thurs.) from Thursday (call BE on Fri.).  Though
    the account value will fluctuate a little in 1 day, you can readily
    tell whether or not Digital is contributing the matching 1/3 up to 2%. 
    This is how I verified that they were contributing the 2% to my account
    each week.  As .44 said, the contributions should be shown on the next
    quarterly statement you should receive in October.
    
    

re: .44

The info that came out about the matching funds specifically stated that
digital's contribution would NOT be listed on your paystub.  It would only
be listed on your SAVE quarterly statement.

- Bryan

    I was contributing at the max. In June, I was cut back to 6%. When I
    called BE, I was told that I had exceeded the limit of $66K. But that
    was only a projection based upon the fact that I had received a wind
    fall from a sales lead, so one week's pay was around $5K. I'll never
    really reach the $66K this year (Field Service, ya know). But I can't
    bump the contributions back up until January.
    	The criteria to determine how much I might make is wrong.
    	Does anyone out there have the name of the pres of BE (or whatever
    he/she is called) so I can point this out to him/her?

    That's certainly curious... From the SAVE brochure, page 3
    
    "Also, if your pay in the previous PLAN year (From July 1, 1993 through
    June 30, 1994) exceeded $66,000, the maximum you can contribute to SAVE
    in the current plan year (from July 1,1994 through June 30,1995) is
    still 8% of pay."
    
    So (1) I really surprised they cut you back to 6%, when even the $66K
    boundary is supposed to limit you to 8%, and (2) the brochure seems 
    to state that the limit is based upon income in the previous plan year.
    
    [Which incidentally I've been wondering how they were going to compute
     given the change in plan year that's going to happen 1/1/96...]
    
    Dave

    	I just checked, and it is 8%, not 6%. My concern is that I was cut
    even though I never reached the $66K, no matter how I figure it.
    	I'd hate to just let it drop just because nobody can provide me
    with an adequate answer, nor will I. If I don't hear by the end of the
    year, I'll escalate the problem to the top and let it trickle down to
    the right people.
    
    Grrrr.

    This whole thing bothers me.  Like I'm getting screwed...again. 
    Wouldn't a much fairer cut off be if you hit the $9200+ dollar limit,
    you get cut out totally until 1 Jan next year?  I too received the %
    reduction letter.  I looked at my contributions for this week ending
    12-09-95.  Sitting at approx. 1/3 of that amount, I see that I am in no
    danger of hitting the limit.  
    
    Just venting, don't suppose that I'm going to get any satisfaction.  
    
    Bryan, usually a RON

Does anyone know what is included in that $66,000 figure?

I've heard Salary, Stock, Moving Expense and Educational benefits.  Anyone
know for sure what is included?

Al Cook

    	There's a description of the plan in
    
    	VTX BENEFITS_US
    
    Select #1 Contents
    #8 for SAVE
    #15 for an explanation of the SAVE limits
    
    

The value for "highly compensated" may have changed.  I thought that I was 
going to fall into it this year, but today's pay stub still shows a 12% 
deduction.  I did some searching on the WWW and found 
http://www.magicnet.net/benefits/laws/pensimpl.html which says that the 
value is now $80,000.

Rich

    Have they changed the limits yet?

    re: .53
    
 > The value for "highly compensated" may have changed.  I thought that I was 
    
    It hasn't changed. It's still $66,000. 
    
    The URL you referenced summarizes _proposed_ legislation, not law.
    Another page from that informative site lists the 1996 COLA values, as
    issued by the IRS:
                                           
 1996 Cost of Living Adjustments to Benefits-Related Internal Revenue Code 
                                Limitations
 
Source: IRS News Release 95-57 
 
Social Security 
 
Taxable Wage Base............ $62,700  (up from $61,200 in 1995) 
 
4980(c)(1)(B) Excess 
 
Distributions Threshhold..... 155,000  (up from $150,000 in 1995) 
 
401(k) 
 
Elective Deferral Cap.......... 9,500  (up from $9,240 in 1995) 
 
401(a)(17) 
 
Compensation Cap............. 150,000  (unchanged from 1995) 
 
414(q) 
 
Highly Compensated Employee 
 
   (based on pay only)....... 100,000  (unchanged from 1995) 
 
   (top-paid group)........... 66,000  (unchanged from 1995) 
 
   (officer).................. 60,000  (unchanged from 1995) 
 
415 
 
Defined Benefit Limit........ 120,000  (unchanged from 1995) 
 
408(k) 
 
SEP Minimum Compensation......... 400  (unchanged from 1995) 
 
--------------------------------------------------------------------------- 
BenefitsLink Table of Contents 
    

    Last year I received the letter mid year telling me that I would be
    limited to the 8% as a H.C.E.  Two day's ago I received a letter
    notifying me that according to their records, this year I would not be
    classified that way and could now contribute 12%.  My situation within
    the company (position no, slight pay increase yes) has not changed.
    
    Just fuel for the fire...
    Bryan