401(k) Q&A | Plan & Industry Content From DWC

How to "Push It" (But Not Too Much) by Prefunding Cash Balance Plans

DWC 10/22/20

Cash Balance Corner: Prefunding Your Cash Balance Plan

Thanks to the last few CB Corner entries, we now know that our plan sponsor Robert Smith, Inc. has a wide range of options when it comes to making contributions to its cash balance plan.

How Can We Tweak Our Plan's Eligibility Requirements to Make Administration Easier?

DWC 10/20/20

DWC 401(k) Q&A: Simplifying Plan Eligibility Determinations

Facts We’ve sponsored our 401(k) plan for several years now, and it’s been very well-received by our employees. Believe it or not, though, one of the biggest challenges we have had is around when employees become eligible. Some of our staff are salaried, while others are hourly. We have both part-time and full-time employees, and we are also ...

How Can We Add More Flexibility to our Standard Profit Sharing Contributions?

DWC 10/13/20

DWC 401(k) Q&A: Adding Flexibility to Profit Sharing Contributions

Facts We have made profit sharing contributions each year, and we plan to continue to do so every year that our financial situation allows. Historically, we have contributed the same percentage of pay for each person, but your previous Question of the Week about using the profit sharing feature to reward certain key performers piqued our interest.

Maximum Contributions: Additional "Opportunities"

DWC 10/8/20

DWC Cash Balance Corner - Maximum Contributions and Tax Deductibility

In our last episode, we mentioned we would move on to developing an ideal funding policy. Before doing so, we realized there is one more aspect of the maximum allowable contribution we need to cover – tax deductibility. After all, the need for additional deductions is one of the main drivers for businesses to setup cash balance plans in the first ...

Can We Tweak our 401(k) to Allow Additional Savings for Reasons More Immediate than Retirement?

DWC 10/6/20

DWC 401(k) Q&A Question of the Week: Tweaking Your 401(k) to Allow Additional Accessible Savings

Facts Our company takes a holistic approach to the benefits we offer. We want our employees to have access to benefits that assist them with their overall financial security. We offer several health insurance options as well as a 401(k) plan with company match. We would also like to make it easy for our employees to set money aside for other ...

Are Discretionary Matching Contributions Becoming a Little Less...Discretionary?

DWC 09/29/20

DWC 401(k) Q&A Question of the Week: New Limitations on Discretionary Matching Contributions

Facts My company has sponsored a 401(k) plan for many years, and it provides for a discretionary matching contribution. I’ve always sought to build in as much flexibility as possible, so having discretion not only in how much we match each year and when we make those contributions (each pay period, monthly, etc.) has worked well for us. I recently ...

Pension Pontifications | Q3 2020

DWC 09/24/20

Over the last several months we’ve been in touch quite a bit to keep you up to date on the many changing regulations occurring in the industry as legislators work to react to current events and adjust to their impacts on retirement plans. So this quarter we’re using our Pension Pontifications column as an opportunity to round up all of the hot ...

Can We Add a Safe Harbor Provision While Maintaining Flexibility in Contribution Costs?

DWC 09/22/20

DWC 401(k) Q&A Question of the Week: Adding Safe Harbor Provision, Maintaining Contribution Cost Flexibility

Facts We currently sponsor a 401(k) plan and have been debating adding a safe harbor provision for 2021. While the idea of buying our way out of the ADP/ACP tests is appealing, we’re nervous about the idea of a mandatory contribution. If cash flow isn’t what we expect in a given year, we don’t want to be stuck with expensive contributions.

Maximum Contributions: "Everybody Wants Some"

DWC 09/17/20

DWC 401(k) Q&A Cash Balance Corner: Calculating Maximum Contributions

Let’s do a little recap. In the last two installments, we discussed what Robert is required to contribute (the Minimum) to his cash balance plan and what he should contribute (the Recommended). Now, we will talk about what he can contribute (the Maximum).

Can a Former Employee Roll a Coronavirus-Related Distribution Back into our Plan?

DWC 09/15/20

Facts Earlier this year, we decided to make the CARES Act coronavirus-related distributions (CRDs) available to participant in our 401(k) plan. We know that it is possible for participants to repay CRDs, but we didn’t anticipate any would be interested in that option. We’re glad that some do now want to repay, but we want to be sure we handle ...

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