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STRATEGIC ISSUES...ONLINE 
For week of December 12, 2005, Issue #240
 
Featured Articles:
1.  How to Get Increased Participation in a 401(k) Plan by Non-Highly Compensated Employees
2.  Focus on Fraud:  Corporate & Identity Theft, Part 8 - Notes
3.  Tech Tip Weekly:  Adding a Picture of Your Face to Your User Account in MS Windows XP
4.  Compliance Calendar
If you would like to have further information on any of these articles, let us know.  We would appreciate receiving your comments and/or suggestions, anytime!
acarroll@pmcpa.com
 
1.  How to Get Increased Participation in a 401(k) Plan by Non-Highly Compensated Employees
 
Business owners and some key executives have been dissatisfied with their company's 401(k) plan because they are all being forced at the end of each year to take some of the salary that they had deferred in the plan back into taxable income because the plan has not passed the nondiscrimination tests with respect to lower paid employees.
 
We wanted to inform you of a recent development in the tax law that may enable your company to change the terms of your 401(k) plan to virtually guarantee that more lower paid employees will participate.  a recent ruling issued by the IRS permits an employer to have a feature in the company 401(k) plan providing for automatic enrollment.  Due to this new ruling, you can draft an amendment to your company's current 401(k) plan that works to automatically enroll all new and current employees in the plan at a certain minimum level (for example, 3 percent).  As part of this arrangement, all employees would have to be given notice of this new arrangement and opportunity to either elect out of participation entirely or to change the level of their contribution.
 
Participation rates in plans using the automatic procedure are significantly higher than the overall 401(k) plan participation rate.  The automatic enrollment feature, therefore, furthers the goal of greater plan participation and also results in more plans satisfying nondiscrimination rules.  If done right, making this change should result in significant favorable implications for highly compensated employees who have been denied full Section 401(k) benefits because the plan has run afoul of the nondiscrimination rules by failing to entice enough lower paid employees to participate.
 
If you would like to explore this type of change to your 401(k) plan, please do not hesitate to call and set up an appointment to discuss this change.
 
 
2.  Focus on Fraud:  Corporate & Identity Theft, Part 8 - Notes
 

Identity Crime Entrenched - Databases

 

HIPPA DATABASE

 

Since October 2003 a new avenue for potential identity thieves

 

Meant to ease information sharing between medical professionals and billings to third-party payers --- a national database of personal information on everyone with healthcare coverage or in the past received health services

 

According to the Act, healthcare-related institutions can disclose information to any number of other organizations and individuals either directly or indirectly related to –

 

            Treatments

            Payments

            Healthcare operations

            Benefits

            Services

 

So, thousands of institutions with thousands of employees have access to personal information on millions of US citizens, with no security standards required for institutions that have access to the HIPPA database

 

It is not known to be used for marketing identities, yet? 

 

Part 9 – Notes . . . next week Identity Crime Entrenched – Databases (Continued)

 

 

 

3.  Tech Tip Weekly: Adding a Picture of Your Face to Your User Account in MS Windows XP

 

Tired of the little spaceman or soccer ball MS Windows XP has added to your User Account photo? Putting your own picture there isn't tough, provided that you have a digital image of yourself stored on your computer.

Don't have a digital image of yourself? Then find a friend with a digital camera, have her snap your picture, and store the picture in your My Pictures folder as a JPG file. Then follow these steps to put that picture on your account:

 

1. Click the Start button, choose Control Panel, and select User Accounts.

 

2. Click Change My Picture.

 

If you're the administrator, you may need to click Change an Account, choose an Account, and then choose Change the Picture.

 

3. Choose Browse for More Pictures.

 

Your My Pictures folder opens up, showing its contents.

 

4. Locate your saved picture, click its name, and click Open.

 

MS Windows grabs your picture and sticks it on your account. Plus, your picture appears as an option in your list of available pictures for swapping.

 

MS Windows shrinks the entire picture to a thumbnail size to place it onto your account image.

 

 

 

4.  Compliance Calendar

 

December 15

-Monthly depositors deposit Social Security, Medicare and withheld income tax for November.

 

December 16

-Employers deposit Social Security, Medicare and withheld income tax for payments December 10, 11, 12, and 13. 

 
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Prangley Marks, LLP
Accountants & Consultants
"The Way We Figure, We Are The Only CPA Firm You Will Ever Need"
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