Conference nyoss1::market_investing

86.0. "401B vs: 401K ????" by FSOA::HWYDOM () Fri Feb 28 1992 08:37

    DEC's 'Save' plan is considered as a 401K program, contributions to 
    which are deducted from gross pay prior to the calculation of both
    Feredal and State taxes as well as the interest being tax deferred. 
    
    My wife also contributes to a tax deferred savings plan where she
    works.  Her plan however does not reduce her State gross, and is not 
    State tax deferred.  Out of curiosity, I called her employer's payroll 
    department and was told their plan was classified as a 401B program which 
    had no impact on the State taxes.  They also classified the program as
    a tax deferred annuity plan (TDA), however it appears to be identical to 
    the DEC option 'A'.
    
    Anyone familiar with any other differences which would explain why 
    contributions are not given favorable State tax treatment?  Also, why
    would an employer choose this option when employees would seem to
    benefit more from a plan like ours?
    
    Thanks
    Herb
    
    
    

    Is your wife's plan like a 403B, set up for municipal employees who
    will receive no social security benefits?  There must be a reason for
    using a different plan.

    Question re lag time between paycheck witholding and fund purchase for
    401b plan.
    
    My husband has $$ deferred from biweekly paycheck into 401b. We have
    noticed an increase in the time between witholding and the actual
    purchase of the Fidelity shares.  There must be some regulation of time
    between the withholding and the purchase. 
    
    Does anyone know what it is?
    
    Example: for the period July 95 thru Dec 95, he had $1115 withheld for
    401b.  The Fidelity year end statement shares purchased for that period
    to be only $692.  This is a good 6 pay periods behind. 
    
    thanks.