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

Roth, Roth and More Roth – as Far as the Eye Can See

Congress seems to be in a continual love fest with two retirement concepts – automatic enrollment and Roth contributions – and SECURE 2.0 (S2) continues the trend for both. I guess it’s not surprising. Automatic enrollment means more tax-deferred contributions (and, therefore, less tax revenue), whereas Roth contributions kick the tax can down the ...

Overtime Is Up and Bonuses Are Down: Will This Year's Irregular Compensation Impact our Retirement Plan?

DWC 12/1/20

DWC 401(k) Q&A: Will Irregular Compensation in 2020 Impact Your Retirement Plan?

Facts We sponsor a 401(k) plan for our employees and provide a company matching contribution to those who defer. Our plan specifies that in calculating that match, we only consider employee base pay and exclude “irregular” forms of pay (specifically bonuses and overtime). This allows us to be more precise when we are building the expected cost of ...

Are There Plan Design Options We Should Consider as Part of the Mandatory Cycle 3 Plan Document Restatement?

DWC 11/10/20

DWC 401(k) Q&A Question of the Week: Plan Design Options to Consider as Part of the Mandatory Cycle 3 Plan Document Restatement

Facts We’ve been following your recent posts about how making even small changes to certain plan provisions can make managing the plan easier without sacrificing our objectives. Making life easier, while minimizing chances for errors…you’ve really been speaking our language.

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 ...

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.

Can We Offer Additional Matching Contributions Without Losing our Safe Harbor Status?

DWC 08/4/20

Facts We currently sponsor a 401(k) plan for our company. While we certainly want to be able to provide meaningful benefits to the owners, our goal is to encourage all our employees to save more for their retirement, and to reward those who do. We were failing our annual testing, so we implemented a safe harbor provision to provide a matching ...

Should We Include Government-Mandated Coronavirus PTO When Calculating Company Contributions?

DWC 04/21/20

Facts We have several employees who have had to take time off from work either because of a loss of childcare or to care for affected family members due to the coronavirus. As a result of recent legislation, they qualify to receive compensation during their leave from work.

How Do We Stop Our Discretionary Matching Contribution?

DWC 03/26/20

Facts My company sponsors a 401(k) plan that provides for a discretionary matching contribution, which we deposit each pay period along with employee deferrals. Given the economic uncertainty, I’m focused on doing what I can to ensure adequate cash flow to maintain operations, including making payroll. That might mean we make the decision to ...

What Common Compliance Issues Should We Be Watching For?

DWC 03/19/19

QOTW - 3.19.2019 - What Common Compliance Issues Should We Be Watching Plan - Plan Compliance

Facts Our company sponsors a 401(k) plan, and we want to make sure we do everything correctly. We have a great staff and have put processes in place to help ensure we operate the plan in a compliant manner. With all the moving parts, however, there is still a concern that we might miss something.

What Is a True-Up Matching Contribution?

DWC 09/18/18

Facts Our 401(k) plan provides for a matching contribution of 50% of the first 6% deferred by each participant (for a maximum match of 3% of pay per year). We deposit the matching contributions to the plan each pay period at the same time we deposit employee deferrals. After year-end for the last couple of years, our TPA has informed us that we ...

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