Pension Plan Design, Administration & Investments

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When must salary deferral contributions and Participant loan payments be deposited? - These amounts should be deposited as soon as the Company knows what amount is due. The Company is not required to make a deposit after every pay period, but does need to make these deposits on a consistent basis.

When are Employer Contributions due? - Employer Contributions are due by the due date of the Employer's federal income tax return, including extensions thereof. In some instances, Employer Matching Contributions are promised to be paid at the same time as Employee Salary Deferrals.

Why does the Plan have to be amended so often? - Each year Congress listens to bureaucrats and constituents regarding retirement plan benefits, tax consequences and inequities. Once legislation is enacted, plan amendments must conform the plan to these new laws. Unfortunately, it isn't realisic to think that Congress will ever leave the retirement plan laws as they are.

How do I initiate a request for a Participant to receive a benefit? - FAX a completed copy of the "Participant Benefit Distribution Package" (found in the Administrative Manual forms section) to us at 317-843-0893.

How long will it take for a Participant to receive a benefit? - Generally, it will take 2-3 weeks for a Participant to actually receive a benefit. This time frame doesn't begin until the Participant's request is received in good order.

Must income taxes be withheld from all benefit distributions? - Distributions that are directly "rolled-over" into an IRA or another qualified plan are exempt from income tax withholding. Unless a distribution is on account of age 70 1/2 or an installment payment that is for a period of 10 years or more, all other distributions made directly to the Participant or Beneficiary are subject to 20% mandatory federal income tax withholding.

Contribution Limits
What is the maximum amount that a Participant may contribute to the Plan in a calendar year? - In 2009, a Participant's salary deferral amount may not exceed the lessor of 100% of the Participant's compensation or $16,500 ($22,000 if the Participant has attained age 50 by December 31, 2009.

What is the maximum amount of compensation that the Plan can consider in awarding contributions/benefits to a Participant? - In 2009, the maximum compensation that may be considered by the Plan is $245,000.

What is the maximum amount that may be credited to a Participant's account in a Plan Year? - In 2009, the maximum amount that may be credited to a Participant is $49,000 ($54,500 if the Participant is attained age 50 by December 31, 2009 and the Participant has made a salary deferral of at least $5,500 in 2009.

What is diversification? - One of the best ways to manage investment risk is to spread your investments over several different types of investment options. This strategy is called diversification. Since different investments respond differently to the investment markets' ups and downs, diversification spreads the risks associated with any one investment option over the risks of all of the investment options. While a diversified portfolio may not always out-perform the top investment option in any given year, over time it will be one of the most effective ways to help you achieve your long-term investment goals.

What is dollar-cost averaging? - Dollar-cost averaging takes place when you invest equal dollar amounts at regular intervals, regardless of market fluctuations. When the investment market is up and the price of your investment is high, your set dollar amount buys fewer units in that funding option. But when the investment market is down, your same dollar amount buys more units. As a result, the average cost of your investment may be reduced, increasing the potential for higher returns.

What is re-balancing? - Over time, your allocations among various investment options will differ from your initial investment allocations. Investment market gains and losses can cause some investment options to grow more quickly than others. This could subject your portfolio to greater risk than you intended, or it could affect your ability to achieve your investment goals as you planned. Portfolio re-balancing allows you to periodically realign (re-balance) your portfolio to bring your investment positions in line with your investment strategy.

Registered Representative, Securities offered through Cambridge Investment Research, Inc. a Broker/Dealer, Member FINRA/SIPC to residents of IN, FL and TX
Investment Advisor Representative, Cambridge Investment Research Advisors, Inc. a Registered Investment Advisor.
Cambridge and Ed Ferguson & Associates, Inc. are not affiliated.
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