Conference 7.286::digital_investing

    
>     What does one have to do with the other?  How can Benefits Express
>    meddle with *anything* to do with your DEC stock just because they 
>    don't want you to take your money out of SAVE? 
    
    Pure speculation on no real information ... because the law says that
    hardship imples that you have used up other sources of cash flow such
    as stock purchase plans before you use claim hardship?
    
    Greg
    

    And FYI, unless its changed, when you stop contributing to the stock
    purchase plan, you automatically get a check for the balance in your
    account.  They won't leave what you've placed there so far until the
    next buy - it gets emptied immediately, and you can't get back in till
    after the next buy.
    
    jeb
    

>      What does one have to do with the other?  How can Benefits Express
>     meddle with *anything* to do with your DEC stock just because they 
>     don't want you to take your money out of SAVE? 

	My guess would be it's IRS regulations that govern hardship
	withdrawels in the first place.

>      I just got a letter from Benefits Express outlining the rules and
>     regulations for optaining a Hardship Withdrawal from the SAVE plan.

	The information is also in the "Your Benefits Book" we received
	in January.

    
     Well, I guess that's what you get when you outsource management
    of your benefit plans to another company. 
    
     It still burns me that Benefits Express has the power to boot me 
    out of the DEC stock plan (ie. stop contributions) without my consent.
    They know that they have something we want, and can do *anything* they
    want 'cause they're the only option we have (like the electric co.)
    
     It also scares me that B.E. is administering our health & pension
    plans.....
    

>      Well, I guess that's what you get when you outsource management
>     of your benefit plans to another company. 

	Are you so sure it wasn't this way *before* Digital outsourced
	the management of the 401k?

>      It still burns me that Benefits Express has the power to boot me 
>     out of the DEC stock plan (ie. stop contributions) without my consent.

	What do you mean by "consent"?  It's CLEARLY stated in your
	benifits book what the implications are of taking a hardship
	withdrawel from your 401k.

	While I'm no fan of Benfits Express myself, your blaming the
	wrong folks in this case ....

    Re; It also scares me that B.E. is administering our health & pension
        plans.....
    
    For what it's worth, I spoke to some mucky-muck at Dec a year or so ago
    about the 401K Stable Value fund.  He told me that the fellow running
    that (then, at least) is the same one who ran it as a Dec employee.  I
    had spoken to that person 2-3 years ago, and came away feeling that he
    was doing a good conservative job.
    
    There is a federal insurance program of some sort for pension plans,
    but I don't know the details or if it's actually any protection -- does
    anyone?
    

    Re .0, i believe what you saw is a part of the finance law and
    regulation, as it was explained to us when we did our hardship
    withdrawal a little more than a year back.  That is, you cannot claim
    hardship such that a withdrawal from your long term savings (whether
    you're doing it for real hardship or not) is warranted and at the same
    time still having extra to put aside for stock purchases or long term
    savings.
    
    In a way, that kinda make sense, don't you think?
    
    --svb

> In a way, that kinda make sense, don't you think?

	Of course it makes sense, since a hardship withdrawel is an
	exceptional condition that is really only intended to be
	a sort of "last resort".

    Kinda on the subject...
    somebody told me that if you take a ("regular") loan out from
    your 401k, you can't contribute anymore until it's paid off.
    
    If true, that kinda sucks.  Perhaps they meant a hardship withdrawal?
    Kratz

    You can contribute but the contributions go to pay off the loan which
    in a sense is money going to your 401K but not invested in any of the
    plans but rather to the loan
    
    

    RE: .10

    In my case, I have a regular, non-hardship, loan on my 401K that I make
    weekly payments against as an automatic withdrawal from my salary, and
    I continue to contribute at the 6% rate to my 401K, also as an automatic
    withdrawal from my salary.  The quarterly statement is quite clear on
    the monies applied both to the outstanding loan and to my choices of
    investment.  As always, verify with Benefits Express.

    Hthy,

	Ron

    re: .10 
    
    No, I don't think that's right.  If you are paying back the loan, there
    should be an amount taken out of your paycheck each week that goes
    directly to paying off the loan.  You will still continue to contribute
    to the 401k at your designated percentage and that will be invested.
    
    That is, unless it's changed in the past 1.5 years, as that's what
    a friend of mine experienced when he took a loan.

    My experience with a SAVE loan is that when you take out the loan, your
    SAVE balances are depleted, according to your current contribution
    rate, by the amount of the loan.  For example, if you take out a $1,000
    loan, and you contribute 60% to fund A, and 40% to fund B, then $600
    will come out of fund A and $400 out of fund B (please, I have no idea
    what happens if the required balances aren't available).
    
    Your regular contributions then continue as normal (under the old SAVE
    plan, remember) in the same percentages, gradually building up to your
    original balance - with one difference.  You have to pay interest on
    the loan.  This interest goes into the account as well.  I don't
    understand the concept (SAVE gets a little extra out of you?), but you
    essentially pay yourself interest so that you pay back more than you
    took out.
    
    It was odd, but it helped out when needed.
    
    Another note:  you can only withdraw up to 50% of your balance, and you
    have to have a certain amount before you are elgible to withdraw.
    
    jeb
    

	> You have to pay interest on the loan.  This interest goes into the 
        > account as well.  
    
        except $75 that goes to H.A. as "processing fee."    
    
    	db

>     You have to pay interest on
>     the loan.  This interest goes into the account as well.  I don't
>     understand the concept (SAVE gets a little extra out of you?), ....

	The concept is simple, ie. it's politics.  Remember, the IRS
	doesn't write the tax code, the polititions in Washington, DC do.

	Do note that while it may seem like a simple way to get more
	money into your 401k, it really depends on what the money you
	have borrowed from yourself would of earned (tax-deferred
	and compounded) had you not borrowed it from your 401k account, etc.

	Also unlike non-deductable IRA contributions that you keep track
	of how much after-tax (ie. already taxed once) money you've
	contributed so that you pay tax on that money when you start
	withdrawing from it, I don't believe that the interest you pay
	(using after-tax money) on your 401k loan is tracked, so you'll
	pay tax on that money (the interest you paid into your 401k)
	a second time when you withdraw it.  However in theory you'll
	likely be in a lower tax-bracket when you start withdrawing
	401k and IRA monies, not to mention that if you're a long way
	from the time you can or have to start making withdrawels,
	inflation will of eroded your after-tax contributions/interest
	payments, and hopefully thanks to tax-deferred compounding,
	that it probably won't make much difference anyways.

    I forgot to mention that, if I recall correctly, the interest rate on
    the payback was 11%.  Probably well over the expected fund return, at
    least over the life of a typical loan.
    
    jeb
    

> I forgot to mention that, if I recall correctly, the interest rate on
> the payback was 11%.  Probably well over the expected fund return, at
> least over the life of a typical loan.

	That's 11% of after-tax money you are putting in.  Assuming
	a 28% tax bracket, if I've done the math correctly, your
	portfolio would only have to do 7.92%.  That's because it's
	tax-deferred.

	Isn't the the long-term average annual return of the S&P500 something
	like 10%, whose equiv. in taxable return would be 13.88%.

The interest rate on a SAVE loan 4 years ago was 7%.
I don't know if the percentage has changed, but was under
the impression that it was set by using the old A fund's return
and rounding to an even fraction.  If it all translated aproximate
...ly the same to the new plan that would be the Stable Value fund.
You have up to 4 years to pay off your loan.

Re: .15 

<<<	Also unlike non-deductable IRA contributions that you keep track
<<<	of how much after-tax (ie. already taxed once) money you've
<<<	contributed so that you pay tax on that money when you start
<<<	withdrawing from it, I don't believe that the interest you pay

I assume you meant to say that you _don't_ pay tax on non-deductible IRA 
contributions when you start to withdraw.

- Scott

> I assume you meant to say that you _don't_ pay tax on non-deductible IRA 
> contributions when you start to withdraw.

	Yup, it was a typo.  Thanks for catching it