A Primer on Qualified Pension and Profit-Sharing Plans

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A Primer on Qualified Pension and Profit-Sharing Plans Powered By Docstoc
					Pension and profit-
sharing plans, long
important wealth-building
and asset-protection
tools, are more valuable
than ever thanks to
legislation passed early
 in this decade. Here’s
an overview for business
advisors about these
plans and what they
can do for employers.

              A Primer on Qualified Pension
              and Profit-Sharing Plans

                                                he Economic Growth and Tax Relief Reconciliation Act
                                                of 2001 (EGTRRA)1 made defined benefit, profit-sharing,
                                                and 401(k) plans even more attractive than before. In
                                                addition to (i) disproportionately large contributions that
  By Stephen M. Margolin and    can be made by an employer on behalf of key employees, (ii) income tax
            Harvey S. Shifrin   deductible contributions to the employer, (iii) tax free accumulation of
                                plan assets, (iv) asset protection from non-family creditors, (v) no current
                                taxability to the employees, and (vi) the accumulated benefits being tax
                                deferred until payment to a participant or his beneficiary, possibly over
                                decades, EGTRRA provides for higher levels of compensation which
                                can be taken into account in calculating benefits as well as removing
                                participants’ elective deferrals from the deduction limit.
                                  1. PL 107-16, 115 Stat 38, effective for plan years beginning after December 31, 2001, available at


                                Stephen M. Margolin is a partner in the Chicago firm of Chuhak & Tecson, PC. He
                                has written and lectured widely on wealth transfer/estate planning and related issues.
                                Harvey S. Shifrin <hshifrin@chuhak.com> is an attorney with Chuhak & Tecson, PC.
                                He is also a CPA and a contributing author of The CPA’s Guide to Retirement Plans for
                                Small Businesses, published by the American Institute of Certified Public Accountants.

   The Pension Protection Act of 2006          Susan) cannot receive an allocation rals without regard to the limitations
(PPA)2 makes permanent the EGTRRA              greater than $45,000 for a total contri- that ordinarily apply to elective defer-
enhancements as well as adding a num-          bution of $135,000 ($45,000 x 3 par- rals or annual additions.16 Participants
ber of attractive features. In addition, the   ticipants).                                 may make catch-up contributions only
new Bankruptcy Act3 strengthens asset              Defined contribution deduction limit. if permitted under the terms of the plan.
protection of qualified plans.                 For defined contribution plans, the gen- Catch-up contributions are adjusted for
   Every advisor to employers should           eral employer contribution deduction inflation annually. The 2007 catch-up
have some familiarity with the various         limit is 25 percent of total participant contribution limit is $5,000.17
legally encouraged tax and asset shel-         compensation.9 Revisiting Wealthmaker,          For example, Bill, a 50-year-old plan
ters. This article offers an overview, in-     the general employer contribution de- participant, defers $15,500 in 2007. He
cluding an illustration of the deductions,     duction limit of 25 percent of partici- also has profit-sharing contributions of
contributions, or benefits available to        pant compensation equals $125,000 $29,500 for total annual additions of
key employees, and the total costs to          ($500,000 x 25 percent). The general $45,000. Bill may also elect to defer an
the employer under different fact pat-         employer contribution deduction limit of additional $5,000 catch-up contribution
terns. For a related article aimed di-         $125,000 applies, since it is less than the for a total 401(k) deferral of $20,500.
rectly at lawyers (especially small-firm       aggregate annual addition
lawyers) as employers, see Michael R.          limit of $135,000.
Maryn, Choosing the Right Retirement               Elective deferral limita­
Plan for Your Law Firm, in the April           tion. 401(k) plans are profit-
2007 Journal.                                  sharing plans with a cash
                                                                                     The Bankruptcy Abuse and
                                               or deferred arrangement.    10
                                                                                     Consumer Protection Act of
What is a qualified plan?                      These “cash or deferred
                                               arrangements” allow par-          2005 increased the protection for
    Qualified plans are plans of deferred
compensation sponsored by employers            ticipants to make elective         qualified plans afforded debtors
on behalf of employees which satisfy the       deferrals of their compen-
requirements of the Internal Revenue           sation otherwise includible         electing bankruptcy protection.
Code of 1986, as amended (the Code).           in their income. Elective

    Qualified plans are established to pro-    deferrals are treated some-
vide for the payment of definitely deter-      what differently from non-
minable benefits over a period of years,       elective contributions.12 The maximum The $5,000 contribution acts to increase
or for life, after retirement.4 The two        deductible elective deferrals for 401(k) the annual addition limit of $45,000 to
main types of qualified plans are defined      plans are adjusted annually for inflation. $50,000. Furthermore, the $5,000 con-
contribution (e.g., profit-sharing/401(k))     For 2007, the maximum 401(k) deferral tribution is not subject to any 401(k) dis-
and defined benefit plans. A defined con-      is $15,500.13                               crimination testing.
tribution plan provides each participant           Elective deferrals not subject to limi­     Compensation limitation. The term
with his own account.5 Defined benefits        tations on deductions. Elective deferral “compensation,” defined in the plan,
plans are all plans that are not defined       contributions to a 401(k) plan are no may include base compensation, bo-
contribution plans.6                           longer subject to the employer contri- nuses, commissions, and salary reduc-
    Upon application by an employer, the       bution deduction limit of 25 percent.14 tion deferrals not included in an employ-
Internal Revenue Service is liberal in is-     So, the full 25 percent employer deduc- ee’s income.
suing a favorable determination letter on      tion for contributions is allowed in addi-      In year 2007, the maximum annual
plan qualification.                            tion to the above maximum elective de- compensation used to determine alloca-
                                               ferrals limits.                             tions or benefits is $225,000 (inflation
Deductions and limits                              For example, Bill and Hillary’s cor- __________
    Annual addition limit. The Code im-        porate compensation each is $100,000.         2. PL 109-280, HR 4, with various effective dates,
poses an individual participant limit on       Their employer establishes a profit-shar- available at http://www.dol.gov/ebsa/pdf/ppa2006.pdf.
annual additions to defined contribution
                                               ing plan with a 401(k) (cash or de- Act ofThe Bankruptcy Abuse and Consumer Protection
                                                                                                   2005. PL 109-08, available at http://www.dpw.
plans. The sum of employer contribu-           ferred) arrangement. The profit-sharing com/practice/code.blackline.pdf.
                                               contribution deduction limit is 25 per-       4. Employee Retirement Income Security Act of
tions, employee contributions, and for-                                                    1974 (ERISA), PL 93-406, 88 Stat 829, §3(2)(A),
feitures (“annual addition”)7 which are        cent of the $200,000 compensation, or available at http://www.ssa.gov/OP_Home/comp2/
allocated to an individual participant’s       $50,000. If, however, each of them made F093-406.html.
                                                                                             5. IRC §414(i).
account cannot exceed the lesser of 100        a 401(k) elective deferral, then each can     6. IRC §414(j).
percent of his compensation or $45,000         have an additional $15,500 withheld           7. IRC §415(c)(2)
                                               and contributed, making the company           8. IRC §415(c)(1).
(inflation adjusted).8                                                                       9. IRC §404(a)(3)(A).
    For example, Fred age 60, George age       contribution $81,000.                         10. IRC §401(k).
49, and Susan age 35, are owner em-                “Catch­up” contributions. Individuals     11. IRC §401(k)(2)(A).
ployees of Wealthmaker Corporation.
                                                                                             12.            contributions,
                                               who participate in 401(k) plans and at- salary Employer contributions. which are other than
They have compensation of $200,000,            tain age 50 by plan year end are permit-      13. IRC §402(g)(1)(B) as modified by IR 2006-162.
                                               ted to make additional “catch-up” con-        14. IRC §404(n).
$200,000 and $100,000, respectively.                                                         15. IRC §414(v)(1) and (5).
The annual addition limit operates so          tributions. These individuals are al-
                                                                                             16. IRC §414(v)(3).
each participant (i.e. Fred, George and        lowed to make these “catch-up” defer-         17. IRC §414(v)(2)(B)(i).

adjusted).18 In the earlier Wealthmaker           For example, Wealthmaker employs            Characteristics of defined
example, if Fred and George each earned       Fred, George, and Susan. If favoring key        contribution plans
$300,000, the contribution limits would       employees (i.e., Fred and George) is de-            Any benefit under a defined contribu-
change, but the increase would be lim-        sirable, it could adopt both a defined          tion plan is based solely on the amounts
ited as only the first $225,000 of com-       benefit plan and a 401(k) plan. EGTRRA          contributed to such participant’s ac-
pensation could be considered, not the        added subparagraph (n) to Section 404           count, plus any income, expenses, gains
full $300,000.                                of the Code. It provides that elective          or losses, and any forfeitures of the ac-
    Defined benefit deduction limits. The     deferrals are not subject to limitations        counts of other participants allocated to
deduction limits for contributions made       on deductions. Therefore, it promotes           his account. Though the contribution to
for key employees in defined benefit          both a defined benefit pension plan and         a defined contribution plan is definite,
plans are very flexible. Limits to defined    a stand-alone 401(k) plan. The 401(k)           the ultimate accrued benefit is not.
benefit plans are based upon the maxi-        permits only elective deferrals and ac-             Employer contributions under a
mum amount a participant may receive          cepts neither employer contributions nor        profit-sharing plan may be either a fixed
upon retirement (generally at age 65),        matching contributions.                         percentage of an employee’s income for
currently $180,000, and adjusted annu-            Furthermore, the employer may con-          a plan year or a completely discretionary
ally for inflation.19                                                                         amount. The employer has great flexibil-
                                              tribute an additional 6 percent of eligi-
    Defined benefit plan contributions                                                        ity in allocating these contributions pro-
                                              ble compensation to a profit-sharing or
are actuarially determined based on age,                                                      vided the plan document allows for such
                                              401(k) plan for years beginning after
earnings assumptions, compensation and                                                        flexibility and certain participation and
                                              December 31, 2005.24 By having both a
years of service. The deduction20 could                                                       nondiscrimination tests are met.25 When
                                              defined benefit plan and a 401(k) plan,
approximate the amounts listed in the                                                         a distributable event occurs, such as re-
sidebar, assuming $225,000 compensa-          Fred and George can each contribute
                                              an additional $15,500 to the 401(k) in          tirement, a participant’s account balance
tion of a participant.                                                                        will consist of the contributions made to
    The defined benefit plan’s flexibility    2007. In addition, Fred (over age 50)
                                              could make a $5,000 catch-up contribu-          the trust for every plan year in which he
can be best demonstrated by examining                                                         was a participant and any forfeitures and
the sidebar on this page in conjunction       tion to the 401(k) plan.
                                                  All three employees could participate       earnings or losses allocated thereto.
with the following example.                                                                       Most new defined contribution plans
    Jack is a high-powered attorney who       in both plans. Because of the great flexi-
                                                                                              are profit-sharing plans with or with-
practices in Washington, DC. Jack is 50       bility of these plans, Fred and George
                                                                                              out 401(k) features. Under EGTRRA,
years old and is the sole owner of his        could enjoy massive defined benefit and
                                                                                              profit-sharing plan contributions after
business, Jack, PC. Jack, PC has one          401(k) contributions and Susan more             __________
other employee, Jill. Jill is a 30-year-old   modest contributions, if the employer             18. IRC §401(a)(17).
assistant, paralegal, and office adminis-     desired.                                          19. IRC §415(b)(1)(A) as modified by IR 2006-162.
                                                  In short, employers can mix and               20. IRC §404(a)(1).
trator. Jack’s practice is very prosperous                                                      21. IRC §401(a).
and he desires to maximize the deduc-         match plans to achieve contribution and           22. IRC §410(a).
tions created for his company at mini-        allocation objectives. There are more so-         23. IRC §§401(a)(4), 401(a)(5), and 410(b), and in
                                                                                              Profit Sharing Plan with cash or deferred arrangements
mal costs.                                    phisticated techniques which can be ap-         must satisfy the Actual Deferral Percentage (ADP) and
    The defined benefit plan works nicely     plied to provide even higher disparity in       Actual Contribution Percentage (ACP) test under IRC
here due to the age disparity of Jack,                                                        Section 401(k) and 401(m) of the Code, respectively.
                                              contribution between key employees and            24. IRC §404(a)(7)(C)(iii), as added by PPA.
PC’s employees. The highly compensated        the rank and file.                                25. IRC §§401(a)(4), 401(a)(5) and 410(b).
Jack (“HCE”), is 20 years older than his
    Under the sidebar example, if the
Jack, PC defined benefit plan contained                           Defined benefit deduction limits
a normal retirement age of 62, Jack’s                      Based on the 94 GAR Mortality Table (as published in Rev Rul 2001-62)
estimated per annum deduction would                                at 4.5 percent and 6.5 percent post-retirement interest.
be at least $123,000. He anticipates a
prosperous year, and even considering            Present Age            Retire Age 62          Retire Age 65               Retire Age 70
the $123,000-plus deduction created for
him and Jill, he felt it would not shelter            35                $32,000-$47,000
his income. Could he obtain a larger de-
                                                      40                $48,000-$65,000
ductible contribution?
                                                      45                $72,000-$96,000
Maximizing plan benefits
    A company may use multiple plans                  50                $123,000-$154,000     $84,000-$106,000
to maximize plan benefits for key em-
ployees. These strategies are permissi-               55                $174,000-$208,000     $148,000-$180,000
ble provided the plans meet Code quali-
                                                      60                                      $173,000-$202,000
fication,21 participation22 and discrimi-
nation testing,23 some of which are de-               65                                                                  $152,000-$175,000
scribed below.

2001 are subject to the same employer        the final or the consecutive high number      quarterly or monthly).
deduction limit of 25 percent as money       of years (typically the final 10 years or
purchase pension plans, but are more         the consecutive high three or five years).    Vesting and forfeitures
flexible; since the contributions are dis-                                                     A qualified plan may impose vest-
cretionary from year to year, whereas        Plan participation                            ing standards that require the partici-
money purchase pension plans require             A qualified plan must satisfy the mini-   pant to complete a certain number of
annual contributions defined by for-         mum participation rules of Code Section       years of service before his accrued bene-
mula. Thus, the use of money purchase        410(a). Under these rules, a plan may         fit derived from employer contributions
pension plans has diminished. Other de-      only impose limited minimum age re-           is fully vested or nonforfeitable. A “year
fined contribution plans are stock bonus     quirements and may not impose maxi-           of service” is a calendar or fixed year
plans, target benefit pension plans and      mum age requirements for participation.       designated by the plan, during which the
employee stock ownership plans.              Certain employees may be excluded in          participant completes 1,000 hours of
   Profit-sharing plans theoretically pro-   determining the statutory requirement         service (although some plans operate
vide for participation by employees in       for participation.                            using an elapsed time system). Code
the employer’s profits. Previously, the          For example, a unit of employees cov-     Section 411 provides two minimum vest-
Code required any profit-sharing contri-     ered by a collective bargaining agree-        ing schedules for defined benefit pen-
butions be made from current or accu-        ment between employee representatives         sion plans:
mulated profits.                             and one or more employers in which                1) Five year cliff vesting, under which
   However, it is now permissible for        retirement benefits were the subject to       an employee must be fully vested in bene-
contributions to be made solely at the       good faith bargaining can be excluded.        fits attributable to employer contribu-
discretion of the employer without re-       It’s important to note that retirement        tions when he has completed at least five
gard to profits.26 The plan must pro-        benefits do not have to be provided,
vide for allocating contributions among                                                    years of vesting service; and
                                             but merely that they were the subject of          2) Three to seven year graded vesting,
the participants and for distributing the    good-faith negotiation.
funds accumulated under the plan after a                                                   under which an employee must be vested
                                                 For defined benefit plans, Code           in a percentage of benefits derived from
fixed number of years, the attainment of     Section 401(a)(26) imposes an addi-
a stated age, or upon the occurrence of                                                    employer contributions according to the
                                             tional employee coverage requirement.         following table:
some event such as disability, retirement,   The plan must cover the lesser of 50 eli-
death or severance of employment.            gible employees or 40 percent of all eli-        Years of service     Vesting percentage
                                             gible employees. In a two-person plan,           3 years of service . . . . . . . . . . 20%
Characteristics of
                                             both employees must be covered.                  4 years of service . . . . . . . . . . 40%
defined benefit plans
                                                 A qualified plan generally may not re-
                                                                                              5 years of service . . . . . . . . . . 60%
    Defined benefit plans provide for pay-   quire an employee to complete a period
ment of definitely determinable benefits     of service extending beyond the later of         6 years of service . . . . . . . . . . 80%
over a period of years, or for life, after   the date the employee attains age 21 or          7 or more years of service . . 100%
retirement.27 Retirement benefits are gen-   the date on which he or she completes            If key employees are credited with
erally based on some combination of          one year of service. However, an em-          more than 60 percent of a plan’s
age, years of service, and compensation      ployer may require that an employee           accrued benefits, it is considered “top
of each employee.28                          complete two years of service to par-         heavy.” Then, in lieu of five-year cliff
    Employer contributions to the plan       ticipate, if it provides that after the two   vesting, three-year cliff vesting applies.
are mandatory.29 Contributions, how-         years of service each participant is fully    Instead of cliff vesting, an employer
ever, are not a ‘fixed percentage’ of com-   vested.
pensation inasmuch as they are calcu-                                                      may utilize the following top heavy
                                                 A year of service for this purpose is
lated using applicable funding rules and                                                   schedule.
                                             a 12-month period during which the
actuarial assumptions. The amount of         employee has completed at least 1,000            Years of service   Vesting percentage
contribution must be sufficient to bring     hours of service. Typically, the 12-month        2 years of service . . . . . . . . . 20%
the assets to the appropriate levels each    period begins on the date the employee
year to fund the benefits offered under                                                       3 years of service . . . . . . . . . 40%
                                             commences employment.
the plan.                                        An employer may choose less restric-         4 years of service . . . . . . . . . 60%
    Unlike defined contribution plans,       tive entry conditions. Thus, a plan may          5 years of service . . . . . . . . . 80%
no individual accounts are established       allow employees to participate as soon as        6 or more years of service . . 100%
under a defined benefit plan. Generally,     they commence employment, if desired.
participants earn additional benefits over       Once an employee has attained both
time, but no assets are segregated within                                                     26. IRC §401(a)(27)(A).
                                             the minimum age and service require-             27. ERISA, PL 93-406, 88 Stat 829, §3(2)(A) and
the plan for those benefits.                 ments, he must participate on the first       IRC §414(j).
    Rather, participants’ benefits are       day of the plan year or six months after         28. BNA – Tax Management Portfolios, Plan
                                                                                           Selection – Pension and Profit Sharing Plans, No 350,
stated as amounts payable at a specified     he satisfies these requirements, which-       III.C.2.c.
time, normally, the participant’s retire-    ever is earlier.30 January 1 and July 1 are      29. IRC §412(h). This subsection provides six
ment. Benefits may be based upon com-        typical entry dates for plans that oper-      exceptions when the “minimum funding standards” of
                                                                                           IRC §412 do not apply. A defined benefit pension plan
pensation earned during the employee’s       ate on the calendar year, although entry      does not fall within any of these six exceptions.
entire career or on the average of either    dates may be more frequent (such as              30. IRC § 410(a)(4).

    For plan years beginning after           assets in a retirement plan are exempt         payments over the life expectancy of the
December 31, 2006, these two vest-           from distribution to a participant’s credi-    employee or for a period of 10 years or
ing schedules also apply to all match-       tors. The general exception to the in-         more, are not exempt from the bank-
ing contributions in defined contribu-       alienability of a participant’s benefit is a   ruptcy estate. Once in the hands of the
tion plans.31 Of course, an employer may     qualified domestic relations order relat-      debtor, they are subject to creditors.
have a less restrictive vesting schedule.    ing to child support, alimony, or mari-
    An employee must be fully vested in      tal property rights of a spouse, former        Distributions
his benefit under the plan when he at-       spouse or dependent.                              Participants in qualified plans are not
tains normal retirement age.32 Normal                                                       subject to income tax on contributions
retirement age is the later of his 65th      New bankruptcy act                             when made to the plan by the employer
birthday or the fifth anniversary of com-        The Bankruptcy Abuse and Consumer          or employee. Earnings on contributions
mencement of participation, or the age       Protection Act of 2005 increased the pro-      are not taxed while they accumulate
specified in the plan, whichever is ear-     tection for qualified plans afforded debt-     within the plan. Taxation occurs when
lier.33 An employee is always fully vested   ors electing bankruptcy protection.            money is distributed from the plan.
in benefits attributable to his own elec-        All assets held in qualified retirement       If the participant does not incur a
tive deferrals (i.e. 401(k) contribution).   plans are exempt from the
Also, an employee is fully vested upon       bankruptcy estate. SEP
termination of the plan.34                   and SIMPLE IRAs as well
    Once an employee is fully vested in      as rollover IRAs and the                    Thanks to EGTRRA,
his benefits, such benefits are nonfor-      earnings thereon are simi-
feitable. In other words, the employ-        larly exempt. In contrast,          disproportionately large income
ee’s rights to vested benefits are uncon-    Roth IRAs and Traditional              tax deductible contributions
ditional and may not be conditioned on       IRAs funded with individ-
any subsequent event.                        ual taxpayer contributions             can be made by an employer
    Generally, all years of service are      are only exempt up to $1                on behalf of key employees.
taken into account under the vesting         million of value.
rules although the employer may exclude          No creditor, including
years of service before age 18, years of     the federal government,
service with an employer when the em-        may reach assets that are
ployer did not maintain the plan or pre-     exempt from the bankruptcy estate. tax when the money is placed into the
decessor plan, and certain years of ser-     However, a “fine, penalty, or forfeiture plan, a tax is incurred when the money
vice when the employee has a five-year       payable to and for the benefit of a gov- is distributed from the plan. Taxation
break in service.                            ernmental unit” is not discharged by a can be further deferred by having the
    A plan may not amend its vesting         bankruptcy.38                                distribution proceeds transferred, or
schedule unless the vested percentage of         In addition, the following taxes are “rolled over,” to another qualified plan
every employee is at least as great as it    not discharged by the bankruptcy: fed- or an individual retirement account
was before the amendment.35                  eral income tax for any return due in the (“IRA”).
                                             past three years, property tax for any re-      Distributions from qualified plans
Asset protection – common                    turn due in the past year, withholding       may be taken in several different forms.
law employees                                tax for all years, employment tax for Among the forms of distributions that
   Code section 401(a)(13) and the           any return due in the past three years, may be made are lump sum distribu-
Employee Retirement Income Security          excise tax for any return due in the past tions, installments over a fixed period of
Act (“ERISA”) section 206(d) provide         three years, customs tax for any return time and life annuity distributions.
                                             due in the past year, penalty for actual        In general, when a participant re-
that a plan must include language that                                                    ceives a distribution, such distribution
benefits may not be assigned or alien-       pecuniary loss in any year. Such claims

ated. In Patterson v Shumate,36 the          will remain valid after the bankruptcy is is taxed as ordinary income in the year
United States Supreme Court held that        completed and can be collected after the of receipt. Distributions of non-deduct-
for a qualified plan subject to ERISA,       bankruptcy, both from assets that were ible employee contributions are possi-
benefits are protected from a partici-       exempt from the bankruptcy estate and ble (but not typical). When they are part
                                             newly acquired assets.                       of a lump sum distribution, they may be
pant’s creditors in bankruptcy. A plan is
subject to ERISA when it covers at least         Required minimum distributions are withdrawn from the plan without any
one common law employee.                     not exempt from the bankruptcy estate. tax on the basis.
                                             Once in the hands of the debtor, they           31.   IRC §411(a)(2)(B) as amended by PPA.
                                             are subject to creditors. No distinction is     32.   IRC § 411 (a).
No common law employees
                                             made between the federal government as          33.   IRC § 411 (8)(A).
                                                                                             34.   IRC § 411 (d)(3).
   For plans covering only owner em-         a creditor and other creditors.                 35.   IRC §411(a)(10).
ployees, state law, not ERISA, controls.        All other distributions, including           36.   504 US 753, KTC 1992-198 (S Ct 1992).
For example, in In re Stern,37 the ninth                                                     37.   317 F3d 1111 (9th Cir 2002).
                                             hardship distributions and those part of        38.   11 USC §523(a)(7).
circuit held that, under California law,     a series of substantially equal periodic        39.   11 USC §§523(a)(1) 507(a)(2) and 507(a)(8).

Conclusion                                 key employees. Earnings and gains ac-        is made, possibly over decades. In addi-
   Qualified plans are extraordinarily     crue tax free.                               tion, the Internal Revenue Service read-
attractive, today more than ever before.      While in trust, plan benefits are pro-
                                                                                        ily and routinely issues favorable deter-
This is because disproportionately large   tected from non-family creditors even in
income tax deductible contributions can    bankruptcy. Tax is deferred until distri-    mination letters on plan qualification be-
be made by an employer on behalf of        bution to a participant or his beneficiary   fore implementation. ■

                                       Reprinted from the Illinois Bar Journal,
                                                Vol. 95 #7, July 2007.
                                     Copyright by the Illinois State Bar Association.