Can We Reduce the Number of HCEs in our Plan?

DWC | 01/15/19

Facts

We set up our company 401(k) plan soon after we started our business.  At the time, we were a small tech company with only a couple of employees.  Over the years the company has grown exponentially, and business has been good to us…really good.

Because of this, the demographics of our company have changed completely.  We have too many of our people who are highly compensated employee (HCEs), and it is causing havoc with our nondiscrimination testing.  Last year, some employees had to take corrective distributions of their deferrals due to failing the ADP test for the first time.

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Can We Change our Plan's Vesting Schedule?

DWC | 01/8/19

Facts

We set up our company 401(k) plan soon after we started the business.  At the time, being able to afford to make a match or profit sharing contribution seemed so distant as to not be worth thinking about.  We were so focused on the only contributions being employee deferrals that we set the vesting schedule at 100% across the board.

The company is now doing really well, and we want to reward our employees by making a generous profit sharing contribution.  The trick is that we would like to apply a lengthy vesting schedule to it as an incentive for our employees to stick around.

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Forgot to (Timely) Execute a Document Restatement? There's a Fix for That!

DWC | 12/20/18

You probably know that establishing a qualified retirement plan requires the formal adoption of a written, legal plan document.  And, if you’ve had a plan in place for any amount of time, you’ve most likely also been required to adopt a handful of mandatory amendments along the way. 

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Hardships & Hurricanes: What are the Hardship Rules Following a Natural Disaster?

DWC | 12/18/18

Facts

Our company sponsors a 401(k) plan.  One of our participants lives in the Florida panhandle and lost her home in Hurricane Michael.  She is under age 59 ½ and is not eligible to take in-service withdrawal, and a loan would only impose a greater burden.  I’ve not seen any direct guidance that permits hardships distributions for those affected by Hurricane Michael the way I have for previous federally declared natural disasters.  She really needs the cash to rebuild her home, but I do not want to approve a hardship that isn’t allowed.

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Are We Still Required to Suspend Deferrals Following a Hardship Distribution?

DWC | 12/11/18

Facts

I sponsor a 401(k) Plan for myself and my staff. I recently processed a hardship distribution for the purchase of my primary residence in October 2018.  I know the rules require me to suspend my deferral elections for six months following a hardship distribution, but I recently came across an article that said I don’t have to impose the suspension anymore.  I’d really like the opportunity to continue deferring if I am allowed.

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Q4 Pension Pontifications

DWC | 12/6/18

All of us here at DWC thrive on the really geeky stuff, and some of the best discussions start with our pontifications about how different topics impact our clients and our industry.  We decided to bring the best of those conversations to you, still with a touch of geekiness but also distilled into easily digested, bite-sized pieces.

This quarter we're taking a look at fraudulent distributions and breaking down what to expect from Washington in the coming months. (Crystal ball not included.)  - As originally published in our Q4 401(k) Q&A Update newsletter

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What is the Deadline to Deposit our Safe Harbor Matching Contribution?

DWC | 12/4/18

Facts

Our company sponsors a safe harbor 401(k) plan that provides a matching contribution equal to 100% of the first 4% each participant defers.  I had always thought that the deadline for us to deposit the match is the due date of our company tax return (with extensions), but my TPA mentioned something about a quarterly deposit requirement.

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Joe Nichols Joins DWC as Firm Actuary

DWC | 12/3/18

SAVANNAH, MO – December 3, 2018 –  DWC - The 401(k) Experts, an industry leader in providing 401(k) plan compliance, defined benefit services, consulting services and third-party plan administration, has hired Joe Nichols as the firm’s first in-house actuary.

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Are RMDs Required for a Retiree Turned Independent Contractor?

DWC | 11/27/18

Facts

We have an employee who attained age 70 ½ earlier in 2018 and will retire by the end of 2018. However, she has agreed to enter into a contract to provide services to our firm and will be reclassified as an independent contractor on December 1, 2018.

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Drama or Comedy: What's Your Holiday Film Favorite?

DWC | 11/20/18

Facts

Here at DWC we're getting into the holiday spirit. We've done our grocery shopping, prepped the pies and pulled out our eating pants. There's just one thing missing. 

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The views expressed in this blog are those of the authors and do not necessarily represent the views of any other person or organization. All content is provided for informational purposes only and is not intended to be tax or legal advice.