Qualified Plans
Wed, 2010-01-06 12:55 | 
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401(k) Plan Distribution Requirements
Distributions from a 401(k) plan are allowed only for the following events:
Why Are Esops Set Up?
You may already know from your own experience that people tend to work harder when they feel a sense of ownership in their jobs. Giving employees the ability to own company stock can make them feel like an important part of the company they work for, increasing their dedication and work effort. When employees feel they are active participants in the workings and direction of their company, they are also more likely to be satisfied with their jobs, reducing turnover.
Who May Participate In A 403(B) Plan?
Employees of non-profit organizations, such as hospitals, museums, public foundations, churches, research organizations, and local governments are eligible for participation in 403(b) plans. Part-time employees may participate in...
When Are Withdrawals Allowed From Roth IRAs?
Only qualified withdrawals of earnings are allowed from a Roth IRA. Qualified withdrawals do not incur taxes. They are what make the Roth IRA attractive to many investors seeking to fund their retirements. Two criteria must be met for earnings to be qualified: the individual must be at least...
When Are IRA Distributions Taxed?
You probably anticipate that the IRS will want a portion of your individual retirement account (IRA). But how much of your IRA distribution is subject to taxes, and when must they be paid? It is important to remember that your IRA consists of both the contributions you have made over the years and the earnings on your contributions. The earnings include reinvested interest and dividends that have accrued over...
What Is A Money Purchase Plan?
Unlike defined benefit plans, defined contribution plans do not promise a specific benefit amount when you retire. Instead, your employer makes contributions to your individual account that are invested on your behalf. Your retirement benefit is the total of the contributions, earnings, and appreciation of the investments in your account. One type of defined contribution plan is calle...
What Is A Profit Sharing Plan?
Profit sharing plans are types of defined contribution plans that have traditionally offered businesses more flexibility, but lower contribution limits, than money purchase or other retirement plans. In a profit sharing plan, the employer determines each year whether or not to make a contribution and how much to contribute to the plan. However, contributions must be "substantial and recurring." As in a money purchase plan, the value of an employee's profit sharing account is the total of...
What Is An Employee Stock Ownership Plan?
An employee stock ownership plan (ESOP) is an employee benefit plan that allocates company stock to employees. By receiving company shares, employees gain partial ownership of the company they work for, including voting rights. All employees age 21 and over who work 1,000 hours or more in a year must be included in the plan. Typically, the longer an employee works for a company, the more shares he or she is eligible to receive. Employees must be...