U.S. rules for 401(k) sponsors
Dear Karen: What are my responsibilities, as plan sponsor, when my employees withdraw from or borrow against their 401(k)s?
Answer: Many small-business owners sponsoring 401(k) plans don’t realize there are procedures and paperwork for each employee who withdraws from or borrows against his or her retirement savings. Soula Tsambiras of accounting firm Citrin Cooperman said fines could be levied against companies that don’t follow Internal Revenue Service and Labor Department rules.
Because 401(k) participants are allowed to withdraw money only in specific “hardship” circumstances, such as buying a first home or paying for college, employers must document those circumstances, Tsambiras said. Once a hardship withdrawal is made, participant deferrals must be suspended, usually for six months. If a participant takes out a loan that isn’t being repaid, it must be recorded as a distribution and taxed.
Plan sponsors also must ensure that a married employee has proof that his or her spouse agrees to the loan or distribution, Tsambiras said. There are tools at the IRS’ Employee Plan Compliance Resolution System, at www.irs.gov/retirement /sponsor/index.html.
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Picking the right domain name
Dear Karen: My preferred domain name is taken. How do I create another one?
Answer: Identify the keywords your target customers will search and use those words in your domain name, putting your most important keyword first. “Keep it short. Use no more than three or four short words -- 55 characters, max -- in your domain name,” said Caroline Melberg, founder of Small Business Mavericks.
Consider using hyphens between the words, which makes your domain easier to read. “If your main keyword choices are taken, consider making one a plural or singular version,” Melberg said. “Or try adding numbers to find a clever, catchy domain name.” You could also add supporting words, such as “online” or “pro,” to your keywords.
“Imagine you are giving your website address over the phone to someone who does not have a pen and paper handy, or over the radio where people are listening in their cars. If your domain makes sense to your prospects, they are much more likely to remember it and type it in once they get to their computer,” Melberg said.
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Ways to honor top employees
Dear Karen: I want to start monthly recognition awards as a way to retain employees. What do you recommend?
Answer: Ask your employees what they want and ask other entrepreneurs in your industry what they do. You can use online survey tools, such as SurveyMonkey.com or Zoomerang.com, or put an informal survey in your company newsletter.
“The results from a survey may help you realize that a family trip to Disneyland is worth a great deal more than a $5,000 cash bonus,” said Andrew Morrison, president of Small Business Camp. “You should also conduct a survey a month after your first program to find out if you could do anything better.”
Some additional options Morrison suggested: Place an employee recognition ad in an industry journal or local paper; secretly involve the employee’s family to create a memorable experience or gift; host a lunch or dinner in the employee’s honor; make a donation to his or her favorite charity.
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