Post by TonyV on Mar 4, 2011 16:56:11 GMT -5
2010 Profit Sharing Q&As
Calculating the Total Hourly Profit Sharing Amount
Q1. What is the overall process for determining a profit share? A. Galeano K. Berry
· Plan Profits and Sales are determined.
· Total Profit Share is then determined by a formula based on return on Plan Sales.
· Eligible Pay is determined for hourly employees.
· Profit Sharing Percentage Factor for hourly employees is determined by dividing the Allocated Profit Share by Eligible Pay.
· Each Employee’s Profit Share is determined by multiplying their Eligible Pay by the Profit Sharing Percentage Factor* that which is applicable to eligible hourly employees.
Q2. How is the total profit sharing amount determined? A. Galeano K. Berry
· Profit sharing is based on profits and sales of the Company’s U.S. auto-related operations.
· The formula pays out:
Pay This % of Profits For Profits As Percent of Sales
- 6% of Profits Up to 1.8% of sales, plus
- 8% Over 1.8% and up to 2.3%, plus
-10% Over 2.3% and up to 4.6%, plus
-14% Over 4.6% and up to 6.9%, plus
-17% Over 6.9% of sales.
Q3. Can you give an example of how the formula works in practice? A. Galeano K. Berry
· Using hypothetical automotive-related numbers, assume:
- U.S. sales of $100 billion
- Total U.S. before-tax profits, as defined in the Plan, of $3.82 billion
(U.S. before-tax Plan Profits are 3.8% of U.S. sales)
· This is the way the total profit sharing amount would be calculated
- Total profit share is total of: (Mils.)
- 6% of U.S. profits up to 1.8% of
U.S. sales (in this example, $1,800 million) $ 108
- 8% of U.S. profits between 1.8% and 2.3% of
U.S. sales (in this example, between $1,800 and $2,300 million) 40
- 10% of U.S. profits between 2.3% and
4.6% of U.S. sales (in this example, between
$2,300 and $3,820 million) 152
- 14% of U.S. profits between 4.6% and
6.9% of U.S. sales (in this example, $0) 0
- 17% of U.S. profits over 6.9% of sales
(in this example, $0) 0
- Total $ 300
The Profit Sharing Percentage Factor
Q4. How is the factor calculated? A. Galeano K. Berry
· The factor is the percentage that results from dividing the Allocated Profit Share by the total Eligible Pay
· Continuing with the previous example, if the profit share allocated to hourly employees was $300 million and eligible pay of all eligible hourly employees was $5,700 million, the percentage factor would be:
Allocated Profit Share = $300 x 100 = 5.26316%
Eligible Pay $5,700
Q5. What is the percentage factor for the 20 1009 plan year? A. GaleanoK. Berry
· The 2009 2010 factor is tentatively scheduled to be announced on February 2 54, 2010.
Eligibility
Q6. Which U.S. employees get p Profit s Sharing?
· Generally, full-time hourly employees and temporary hourly employees working a full-time schedule at U.S. operations (Ford Direct and Ford Leased) hired before January 1, 2011 , will participate in Profit Sharing -- with the exceptions of:
Þ Employees who break service anytime during the year prior to January 1, 2011 , for any reason other than death, layoff, retirement or sale of an operation
· Generally, full-time employees of U.S. operations (Ford Direct and Ford Leased) hired before January 1, 2010 1 will participate in Pprofit Ssharing -- with the exceptions of:
Þ Employees who break service anytime during the year prior to January 1, 2010 1 for any reason other than death, layoff, retirement or sale of an operation
Þ Non-regular hourly employees, such as temporary part-time employees
Employees Who Change Status
Q7. Will an employee who transfers during a plan year into an eligible operation or changes employment status receive a profit share?
· If an employee meets all the eligibility requirements after transfer to an eligible operation or changes employment status (Hourly to Salar iedy / Salar iedy to Hourly) during the plan year, the employee will be eligible to participate based on eligible pay affected by the transfer.
· Example of becoming eligible during the plan year: an employee changing status from Salar iedy to Hourly on April 1, 200 19 0:
Ø The employee participates in profit sharing from April 1 through year-end 2009 10. Eligible pay earned during this nine-month period would be used to determine the individual’s profit sharing amount .
Determining Each Eligible Employee’s Share
Q8. What differences may be reflected on either the Form W-2 or year-to-date gross earnings on the year-end pay stub that are not eligible for profit sharing purposes? Jim Weaks
·A profit sharing report, detailing hourly employees' eligibility and eligible/ineligible wages, will be available February 22, 201 1 ,TBD in the I NFOPACnfopac online reporting toolsystem to tool to help payroll coordinators resolve differences. Report name is PROFDET and access is limited by location. If you require access, please go to the Employee Paymentspayroll website at dept.sp.ford.com/sites/employeepayments/Pages/Default.aspx www.finance.ford.com/payroll/us and click on INFOPAC in the FORMS section to request access. You will need to specify the payroll location(s) that you need access to and be authorized by an LL6 or above (supervisor/manager).
·
Q9. How is pay received in 201 10, but earned in 20 1009 treated?
· Amounts of eligible 2009 pay that are paid in 2010 are counted. If the date of the paycheck is in 20 1009, the related eligible pay is included in 20 1009 eligible pay.
· If the pay is earned in 20 1009, but paid in 201 10, it is excluded from the 20 1009 profit sharing calculation.
· For hourly employees, 20 1009 eligible earnings include the pay endings January 3December 28, 20 10 ,08 through December 2 67, 20 1009.
Deductions from Profit Sharing Checks
Q10. What is deducted from profit sharing checks? Susan Williams; Rosemary Parker; Jim Weaks Valinda Vincent
· Portions Elections contributed to TESPHE, Pre-Tax Contributions, are not subject to Federal income taxes. However, Social Security taxes, applicable state and local taxes, bankruptcy, garnishments, federal and state levies, in locations where required, and union dues (if applicable) will be deducted. TESPHE elections for the p P rofit S s har e ing payout will be suspended if there are outstanding Child Support Arrearages. Refer to the third bullet of this question for more information on deductions
· For portions Elections to be paid by check /direct deposit, or deposited to Ford Money Market Interest Advantage (FIA) Account AccountError! Bookmark not defined. (FMMAFIA), deductions include will be taken as follows:
Þ Federal income taxes - presently 25%
Þ Social security taxes - presently 7 5.65%
Þ State and local taxes, if applicable – e.g. 3.9% for State of Michigan
Þ Child Support Arrearages Outstanding Income Withholding Orders
Þ Friend of the Court payments (if applicable)
Þ Bankr u ptcy payments
Þ Garnishments wage deduction orders
Þ Federal or s tate levies
Þ Union dues - presently 1.15% (if applicable) - see question 24
Þ Federal or State levies (if applicable) - remainder paid in cash
· Deductions are taken from the portion of the p Profit Sshar inge paid by check or deposited in FMMA FIA, and any uncollectible taxes and/or union dues will be deducted from the next regular paycheck(s) to the extent necessary necessary to collect amounts due . (e.g., pay ending 03/06/05), and This could result in net $0 for future pay checks after profit sharing payouts due to elections.
· Florida, Minnesota, Kentucky and Ohio employees may be subject to support orders see Payroll’s letter of February 25, 2010 (page 16 of this book).
· Note: Employees who elected FMMA FIA and do not have an active payroll deducted ion FMMA FIA account, established by January 23 1, 2010 1, will not be able to choose ineligible to elect this option and will automatically receive a check for the appropriate amount.
Deduction Type Summary:
TESPHE
FMMA FIA
CHECK
Federal Income Taxes
No
Yes
Yes
Social Security Taxes
Yes
Yes
Yes
State and Local Taxes
No *
Yes
Yes
Friend of the Court Child Support Arrearage
**
** Yes
Yes
Federal and/or State Levies
Yes
Yes
Yes
Bankruptcy
Yes
Yes
Yes
Garnishment Wage Order
Yes
Yes
Yes
Union Dues
Yes
Yes
Yes
Federal or State Levies (if applicable)
**
**
Yes
All states except New Jersey & Pennsylvania conform to the Federal treatment of 401(k) plans. Local tax practices vary. Tax practices for profit sharing contributions will follow the same practices as contributions for regular pay.
*Varies per state and local governances. Contact your local and state tax authorities for guid ance.
** If the employee is subject to Friend of the Court Child Support ,arrearages or any Federal or State levies, their TESPHE and/or FMMA FIA election will be cancelled cancelled.if so ordered by those courts and the profit share will be issued by check..
Q11. How are union dues calculated? Jim Weaks Valinda Vincent
· Payroll first calculates “eligible union wages” which are straight-time hourly base wages (first 40 hours per week), holiday pay, vacation pay, associated cost-of-living allowance, bereavement and jury duty.
· “Eligible union wages” are multiplied by the profit sharing factor then multiplied by the union dues factor of 1.15%.
·
Eligible Pay for Hourly Employees
Q12. What types of hourly pay count towards eligible pay for profit sharing? Jim Weaks
ELIGIBLE PAY INCLUDES:
Þ Straight-time hourly base wages (for straight-time hours and overtime hours) before wage reduction under the Tax-Efficient Savings Plan for Hourly Employees
Þ Straight-time cost-of-living allowance (for straight-time hours and overtime hours)
Þ Straight-time shift premiums (for straight-time hours and overtime hours)
Þ Vacation and excused absence allowance
Þ Apprentice training incentive payments
Þ Seven-day operation bonus
Þ Bereavement pay
Þ Jury duty pay
Þ Short-term military duty pay
Þ Call-in pay
Þ Certain grievance awards
Þ Christmas bonus
Þ Holiday pay
Þ Eligible employees are given eligible pay credit for periods of local union leave or medical leave while receiving workers’ compensation (provided they work at least one full week in the calendar year and all other contract conditions are met), and scheduled hours missed during a Gradual Return to Work Program
ELIGIBLE PAY DOES NOT INCLUDE:
Þ Overtime, Saturday, Sunday and holiday premium payments in excess of the
straight-time hourly rate
Þ CIRS/Suggestion Awards
Þ Taxable income for group life insurance over $50,000
Þ Prior year’s profit sharing payment (if any)
Þ Short work week payments
Þ Supplemental Unemployment Benefit payments
Þ Incentive Pay
Þ Tool Allowances
Þ Moving Allowance
Þ 2009 Hourly Performance Bonus payment
Þ Lump-sum separation or transfer incentive payments
Contributions to TESPHE
Q13. When are p Profit s Sharing contributions credited to TESPHE and FIA accounts? R. Parker
· As soon as possible, usually within two business days after Profit Sharing Day.
Q14. Why wouldn’t the profit sharing voice-response system allow employees to contribute 100% of their profit sharing payment into their TESPHE accounts? R. Parker
·If an employee’s 2009 gross earnings (including TESPHE contributions) exceeded $90,000, they are considered a higher-paid employee (under IRS rules) in 2010, for Company tax deduction purposes. To maintain the qualified status of the Plan, the Company determined that higher-paid employees' contributions must be limited to 50% of their 2009 profit sharing payment to TESPHE, just as they were for the 1993 through 2000 and 2002-2003 Plan Year profit sharing payments.
Q15 4. Why wasn’t all of my p Profit s Sharing deposited to my TESPHE account even though my confirmation shows I elected 100% TESPHE? R. Parker
Under Federal tax law, an employee’s total TESPHE contributions (including any portion of your resulting from Profit Ssharing payment ) and other payroll deductions cannot exceed certain regulatory limitations : of gross
earnings:
· Pre-tax TESPHE contributions totaling $14,000 16,500 for the 201 10 Tax Year (NOTE: Federal 401(k) “Catch–up” program will allow eligible employees (50 years of age or more) an additional $4,000 for 2010.)
· Total contributions (all payroll deductions) cannot exceed a certain amount per pay period on a cumulative basis $3,500 monthly ($42,000 49,000 annually during the TESPHE limitation year , April 1 through March 31).
· These pay-period limits are calculated automatically and take into the account the amount you have contributed at the point your p P rofit S s haring payment is made during the TESPHE limitation year. ]
· Also, as noted above, any TESPHE Profit Sharing payment option election will be cancelled if you have child support arrearages .
Calculation for any legal limitations (Internal Revenue Code Section 415) for profit
sharing is based on earnings from pay endings April 4, 2009 through March 27, 2010 plus profit sharing. The hourly limitation year differs from the salaried
limitation year due to the UAW Collective Bargaining Agreement
Q16. Can electing to place all or a portion of my profit sharing affect my ability?
to reach the maximum annual TESPHE Pre-Tax contribution? R. Parker
·If you are making monthly contributions to TESPHE and plan to reach the plan maximum for Pre-Tax contributions this year, please note the following: Your Profit Sharing allocation to TESPHE may prevent you from contributing a portion of the last Pre-Tax dollar to the plan maximum. Your Profit Sharing allocation could include fractional dollars (cents), while your regular weekly payroll deducted contribution is made in whole dollars. This may prevent you from achieving the absolute maximum annual Pre-Tax contribution when total Pre-Tax contributions are within one dollar of the legal limitation. For example, if your Profit Sharing allocation was $100.54, and the plan maximum was $14,000.00 (the case for 2010), your potential Pre-Tax contribution for the year would stop at $13,999.54 -- you would not be able to contribute the remaining 46 cents of your legal eligibility to TESPHE to reach the plan Pre-Tax maximum. The remainder of the last Pre-Tax dollar cannot be added to TESPHE if your Profit Sharing allocation includes cents. Any subsequent payroll deductions would be considered After-Tax contributions, if your TESPHE is formatted to accept After-tax contributions.
Miscellaneous
Q17 5. Will Pprofit Ssharing checks be direct deposited?
·Yes, Profit Sharing payments will follow the distribution process of regular paychecks.
Q1 68. Who should I contact if I believe that I am eligible for a p Profit s Shar inge but do not receive payment? Jim Weaks
Please contact your local h uman r esources activity or /payroll coordinator .
Calculating the Total Hourly Profit Sharing Amount
Q1. What is the overall process for determining a profit share? A. Galeano K. Berry
· Plan Profits and Sales are determined.
· Total Profit Share is then determined by a formula based on return on Plan Sales.
· Eligible Pay is determined for hourly employees.
· Profit Sharing Percentage Factor for hourly employees is determined by dividing the Allocated Profit Share by Eligible Pay.
· Each Employee’s Profit Share is determined by multiplying their Eligible Pay by the Profit Sharing Percentage Factor* that which is applicable to eligible hourly employees.
Q2. How is the total profit sharing amount determined? A. Galeano K. Berry
· Profit sharing is based on profits and sales of the Company’s U.S. auto-related operations.
· The formula pays out:
Pay This % of Profits For Profits As Percent of Sales
- 6% of Profits Up to 1.8% of sales, plus
- 8% Over 1.8% and up to 2.3%, plus
-10% Over 2.3% and up to 4.6%, plus
-14% Over 4.6% and up to 6.9%, plus
-17% Over 6.9% of sales.
Q3. Can you give an example of how the formula works in practice? A. Galeano K. Berry
· Using hypothetical automotive-related numbers, assume:
- U.S. sales of $100 billion
- Total U.S. before-tax profits, as defined in the Plan, of $3.82 billion
(U.S. before-tax Plan Profits are 3.8% of U.S. sales)
· This is the way the total profit sharing amount would be calculated
- Total profit share is total of: (Mils.)
- 6% of U.S. profits up to 1.8% of
U.S. sales (in this example, $1,800 million) $ 108
- 8% of U.S. profits between 1.8% and 2.3% of
U.S. sales (in this example, between $1,800 and $2,300 million) 40
- 10% of U.S. profits between 2.3% and
4.6% of U.S. sales (in this example, between
$2,300 and $3,820 million) 152
- 14% of U.S. profits between 4.6% and
6.9% of U.S. sales (in this example, $0) 0
- 17% of U.S. profits over 6.9% of sales
(in this example, $0) 0
- Total $ 300
The Profit Sharing Percentage Factor
Q4. How is the factor calculated? A. Galeano K. Berry
· The factor is the percentage that results from dividing the Allocated Profit Share by the total Eligible Pay
· Continuing with the previous example, if the profit share allocated to hourly employees was $300 million and eligible pay of all eligible hourly employees was $5,700 million, the percentage factor would be:
Allocated Profit Share = $300 x 100 = 5.26316%
Eligible Pay $5,700
Q5. What is the percentage factor for the 20 1009 plan year? A. GaleanoK. Berry
· The 2009 2010 factor is tentatively scheduled to be announced on February 2 54, 2010.
Eligibility
Q6. Which U.S. employees get p Profit s Sharing?
· Generally, full-time hourly employees and temporary hourly employees working a full-time schedule at U.S. operations (Ford Direct and Ford Leased) hired before January 1, 2011 , will participate in Profit Sharing -- with the exceptions of:
Þ Employees who break service anytime during the year prior to January 1, 2011 , for any reason other than death, layoff, retirement or sale of an operation
· Generally, full-time employees of U.S. operations (Ford Direct and Ford Leased) hired before January 1, 2010 1 will participate in Pprofit Ssharing -- with the exceptions of:
Þ Employees who break service anytime during the year prior to January 1, 2010 1 for any reason other than death, layoff, retirement or sale of an operation
Þ Non-regular hourly employees, such as temporary part-time employees
Employees Who Change Status
Q7. Will an employee who transfers during a plan year into an eligible operation or changes employment status receive a profit share?
· If an employee meets all the eligibility requirements after transfer to an eligible operation or changes employment status (Hourly to Salar iedy / Salar iedy to Hourly) during the plan year, the employee will be eligible to participate based on eligible pay affected by the transfer.
· Example of becoming eligible during the plan year: an employee changing status from Salar iedy to Hourly on April 1, 200 19 0:
Ø The employee participates in profit sharing from April 1 through year-end 2009 10. Eligible pay earned during this nine-month period would be used to determine the individual’s profit sharing amount .
Determining Each Eligible Employee’s Share
Q8. What differences may be reflected on either the Form W-2 or year-to-date gross earnings on the year-end pay stub that are not eligible for profit sharing purposes? Jim Weaks
·A profit sharing report, detailing hourly employees' eligibility and eligible/ineligible wages, will be available February 22, 201 1 ,TBD in the I NFOPACnfopac online reporting toolsystem to tool to help payroll coordinators resolve differences. Report name is PROFDET and access is limited by location. If you require access, please go to the Employee Paymentspayroll website at dept.sp.ford.com/sites/employeepayments/Pages/Default.aspx www.finance.ford.com/payroll/us and click on INFOPAC in the FORMS section to request access. You will need to specify the payroll location(s) that you need access to and be authorized by an LL6 or above (supervisor/manager).
·
Q9. How is pay received in 201 10, but earned in 20 1009 treated?
· Amounts of eligible 2009 pay that are paid in 2010 are counted. If the date of the paycheck is in 20 1009, the related eligible pay is included in 20 1009 eligible pay.
· If the pay is earned in 20 1009, but paid in 201 10, it is excluded from the 20 1009 profit sharing calculation.
· For hourly employees, 20 1009 eligible earnings include the pay endings January 3December 28, 20 10 ,08 through December 2 67, 20 1009.
Deductions from Profit Sharing Checks
Q10. What is deducted from profit sharing checks? Susan Williams; Rosemary Parker; Jim Weaks Valinda Vincent
· Portions Elections contributed to TESPHE, Pre-Tax Contributions, are not subject to Federal income taxes. However, Social Security taxes, applicable state and local taxes, bankruptcy, garnishments, federal and state levies, in locations where required, and union dues (if applicable) will be deducted. TESPHE elections for the p P rofit S s har e ing payout will be suspended if there are outstanding Child Support Arrearages. Refer to the third bullet of this question for more information on deductions
· For portions Elections to be paid by check /direct deposit, or deposited to Ford Money Market Interest Advantage (FIA) Account AccountError! Bookmark not defined. (FMMAFIA), deductions include will be taken as follows:
Þ Federal income taxes - presently 25%
Þ Social security taxes - presently 7 5.65%
Þ State and local taxes, if applicable – e.g. 3.9% for State of Michigan
Þ Child Support Arrearages Outstanding Income Withholding Orders
Þ Friend of the Court payments (if applicable)
Þ Bankr u ptcy payments
Þ Garnishments wage deduction orders
Þ Federal or s tate levies
Þ Union dues - presently 1.15% (if applicable) - see question 24
Þ Federal or State levies (if applicable) - remainder paid in cash
· Deductions are taken from the portion of the p Profit Sshar inge paid by check or deposited in FMMA FIA, and any uncollectible taxes and/or union dues will be deducted from the next regular paycheck(s) to the extent necessary necessary to collect amounts due . (e.g., pay ending 03/06/05), and This could result in net $0 for future pay checks after profit sharing payouts due to elections.
· Florida, Minnesota, Kentucky and Ohio employees may be subject to support orders see Payroll’s letter of February 25, 2010 (page 16 of this book).
· Note: Employees who elected FMMA FIA and do not have an active payroll deducted ion FMMA FIA account, established by January 23 1, 2010 1, will not be able to choose ineligible to elect this option and will automatically receive a check for the appropriate amount.
Deduction Type Summary:
TESPHE
FMMA FIA
CHECK
Federal Income Taxes
No
Yes
Yes
Social Security Taxes
Yes
Yes
Yes
State and Local Taxes
No *
Yes
Yes
Friend of the Court Child Support Arrearage
**
** Yes
Yes
Federal and/or State Levies
Yes
Yes
Yes
Bankruptcy
Yes
Yes
Yes
Garnishment Wage Order
Yes
Yes
Yes
Union Dues
Yes
Yes
Yes
Federal or State Levies (if applicable)
**
**
Yes
All states except New Jersey & Pennsylvania conform to the Federal treatment of 401(k) plans. Local tax practices vary. Tax practices for profit sharing contributions will follow the same practices as contributions for regular pay.
*Varies per state and local governances. Contact your local and state tax authorities for guid ance.
** If the employee is subject to Friend of the Court Child Support ,arrearages or any Federal or State levies, their TESPHE and/or FMMA FIA election will be cancelled cancelled.if so ordered by those courts and the profit share will be issued by check..
Q11. How are union dues calculated? Jim Weaks Valinda Vincent
· Payroll first calculates “eligible union wages” which are straight-time hourly base wages (first 40 hours per week), holiday pay, vacation pay, associated cost-of-living allowance, bereavement and jury duty.
· “Eligible union wages” are multiplied by the profit sharing factor then multiplied by the union dues factor of 1.15%.
·
Eligible Pay for Hourly Employees
Q12. What types of hourly pay count towards eligible pay for profit sharing? Jim Weaks
ELIGIBLE PAY INCLUDES:
Þ Straight-time hourly base wages (for straight-time hours and overtime hours) before wage reduction under the Tax-Efficient Savings Plan for Hourly Employees
Þ Straight-time cost-of-living allowance (for straight-time hours and overtime hours)
Þ Straight-time shift premiums (for straight-time hours and overtime hours)
Þ Vacation and excused absence allowance
Þ Apprentice training incentive payments
Þ Seven-day operation bonus
Þ Bereavement pay
Þ Jury duty pay
Þ Short-term military duty pay
Þ Call-in pay
Þ Certain grievance awards
Þ Christmas bonus
Þ Holiday pay
Þ Eligible employees are given eligible pay credit for periods of local union leave or medical leave while receiving workers’ compensation (provided they work at least one full week in the calendar year and all other contract conditions are met), and scheduled hours missed during a Gradual Return to Work Program
ELIGIBLE PAY DOES NOT INCLUDE:
Þ Overtime, Saturday, Sunday and holiday premium payments in excess of the
straight-time hourly rate
Þ CIRS/Suggestion Awards
Þ Taxable income for group life insurance over $50,000
Þ Prior year’s profit sharing payment (if any)
Þ Short work week payments
Þ Supplemental Unemployment Benefit payments
Þ Incentive Pay
Þ Tool Allowances
Þ Moving Allowance
Þ 2009 Hourly Performance Bonus payment
Þ Lump-sum separation or transfer incentive payments
Contributions to TESPHE
Q13. When are p Profit s Sharing contributions credited to TESPHE and FIA accounts? R. Parker
· As soon as possible, usually within two business days after Profit Sharing Day.
Q14. Why wouldn’t the profit sharing voice-response system allow employees to contribute 100% of their profit sharing payment into their TESPHE accounts? R. Parker
·If an employee’s 2009 gross earnings (including TESPHE contributions) exceeded $90,000, they are considered a higher-paid employee (under IRS rules) in 2010, for Company tax deduction purposes. To maintain the qualified status of the Plan, the Company determined that higher-paid employees' contributions must be limited to 50% of their 2009 profit sharing payment to TESPHE, just as they were for the 1993 through 2000 and 2002-2003 Plan Year profit sharing payments.
Q15 4. Why wasn’t all of my p Profit s Sharing deposited to my TESPHE account even though my confirmation shows I elected 100% TESPHE? R. Parker
Under Federal tax law, an employee’s total TESPHE contributions (including any portion of your resulting from Profit Ssharing payment ) and other payroll deductions cannot exceed certain regulatory limitations : of gross
earnings:
· Pre-tax TESPHE contributions totaling $14,000 16,500 for the 201 10 Tax Year (NOTE: Federal 401(k) “Catch–up” program will allow eligible employees (50 years of age or more) an additional $4,000 for 2010.)
· Total contributions (all payroll deductions) cannot exceed a certain amount per pay period on a cumulative basis $3,500 monthly ($42,000 49,000 annually during the TESPHE limitation year , April 1 through March 31).
· These pay-period limits are calculated automatically and take into the account the amount you have contributed at the point your p P rofit S s haring payment is made during the TESPHE limitation year. ]
· Also, as noted above, any TESPHE Profit Sharing payment option election will be cancelled if you have child support arrearages .
Calculation for any legal limitations (Internal Revenue Code Section 415) for profit
sharing is based on earnings from pay endings April 4, 2009 through March 27, 2010 plus profit sharing. The hourly limitation year differs from the salaried
limitation year due to the UAW Collective Bargaining Agreement
Q16. Can electing to place all or a portion of my profit sharing affect my ability?
to reach the maximum annual TESPHE Pre-Tax contribution? R. Parker
·If you are making monthly contributions to TESPHE and plan to reach the plan maximum for Pre-Tax contributions this year, please note the following: Your Profit Sharing allocation to TESPHE may prevent you from contributing a portion of the last Pre-Tax dollar to the plan maximum. Your Profit Sharing allocation could include fractional dollars (cents), while your regular weekly payroll deducted contribution is made in whole dollars. This may prevent you from achieving the absolute maximum annual Pre-Tax contribution when total Pre-Tax contributions are within one dollar of the legal limitation. For example, if your Profit Sharing allocation was $100.54, and the plan maximum was $14,000.00 (the case for 2010), your potential Pre-Tax contribution for the year would stop at $13,999.54 -- you would not be able to contribute the remaining 46 cents of your legal eligibility to TESPHE to reach the plan Pre-Tax maximum. The remainder of the last Pre-Tax dollar cannot be added to TESPHE if your Profit Sharing allocation includes cents. Any subsequent payroll deductions would be considered After-Tax contributions, if your TESPHE is formatted to accept After-tax contributions.
Miscellaneous
Q17 5. Will Pprofit Ssharing checks be direct deposited?
·Yes, Profit Sharing payments will follow the distribution process of regular paychecks.
Q1 68. Who should I contact if I believe that I am eligible for a p Profit s Shar inge but do not receive payment? Jim Weaks
Please contact your local h uman r esources activity or /payroll coordinator .