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Nondiscrimination Testing

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DWC |

How to Allocate Profit Sharing Contributions

Many retirement plans are designed to include a feature that allows the plan sponsor to make a profit sharing contribution each year. Since IRS rules allow the contribution to be discretionary ...
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DWC |

Don't make these Compensation Errors in Your Retirement Plan

According to the IRS, using incorrect compensation amounts to calculate retirement plan benefits and conduct annual compliance testing is one of the most common errors they see. How can such a ...
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Designing Your 401(k) Plan for Combined Testing
DWC |

Designing Your 401(k) Plan for Combined Testing

Thousands of 401(k) plans are designed each year to promote savings in the most cost-effective manner. Most are established as stand-alone plans and will remain that way for their entire existence. ...
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Nondiscriminatory Benefit Amounts
DWC |

Nondiscriminatory Benefit Amounts - Treat Me Right

Outside the complex world of qualified plans, the term “nondiscrimination” can take on many different meanings based on many different points of view. Fortunately, in the qualified plan world, the ...
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Nondiscrimination Testing Creates Career Opportunities
DWC |

Nondiscrimination Testing Creates Career Opportunites

Sponsoring a retirement plan can provide significant benefits to a company (and its participants). But with great benefits comes great responsibility…responsibility to follow all of the various ...
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DWC |

Why Does My Year-End Census Require Ownership and Family Information?

Facts We’ve compiled our year end census information, and we are now turning out attention to the accompanying questionnaire. I’m being asked for additional information such as ownership percentages, ...
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DWC |

Which Financial Details Do I Have to Include on my Year-End Census?

Facts Last week, you explained some the demographic data points that get reported on the annual census. Now, I’ve got some questions on the financial information I’ve been asked to provide to my TPA. ...
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DWC 401(k) Q&A Question of the Week: Which Employees Do I Have to Report on my Year-End Census Report?
DWC |

Which Employees Do I Have to Report on my Year-End Census Report?

Facts As for so many companies, the end of one year and the start of the next are especially busy times. And, without fail, we’ve already received the request for our annual census data from our ...
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DWC 401(k) Q&A: Will Irregular Compensation in 2020 Impact Your Retirement Plan?
DWC |

Overtime Is Up and Bonuses Are Down: Will This Year's Irregular Compensation Impact our 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 ...
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DWC 401(k) Q&A Question of the Week: DWC's Thanksgiving Dinner Prep Playlist
DWC |

DWC's Thanksgiving Dinner Prep Playlist

Facts All year long we've been leaving little rock 'n' roll Easter eggs in our Cash Balance Corner feed. ICYMI: Each post title incorporates one of our favorite songs. And for our 20th century rock ...
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DWC 401(k) Q&A Question of the Week: Impact of Furloughed Employees on Retirement Plan at Year-End
DWC |

How Do Furloughed Employees Impact Our Plan at Year-End?

Facts Like many businesses, we had to furlough some employees earlier this year in response to the coronavirus shutdowns. We’ve been fortunate enough to bring back a few of these employees, but a ...
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DWC 401(k) Q&A: Adding Flexibility to Profit Sharing Contributions
DWC |

How Can We Add More Flexibility to our Standard 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 ...
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DWC 401(k) Q&A Correction of the Quarter: Your Definition of Compensation Isn't in the ERISA Dictionary? We've Got a Fix for That!
DWC |

Your Definition of Compensation Isn't in the ERISA Dictionary? We've Got a Fix for That.

Getting creative with the plan’s definition of compensation can be an effective way to target benefits, budget your benefit dollars, and maintain consistent benefit levels from year to year. However, ...
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DWC 401(k) Q&A: Can We Offer Additional Matching Contributions Without Losing our Safe Harbor Status?_Retirement Plan Design
DWC |

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

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 ...
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DWC 401(k) Q&A: Can We Offer Higher Profit Sharing Contributions to Employees Based on Performance?_Retirement Plan Compliance
DWC |

Can We Offer Higher Profit Sharing Contributions to Employees Based on Performance?

Facts We’ve had a 401(k) plan for years, but we are now looking at ways to make it a more strategic part of our overall compensation package. In one of your previous Questions of the Week, you ...
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DWC 401(k) Q&A: 401(k) vs. 403(b) - Which Is the Best Plan Design for My Non-Profit?_Retirement Plan Design
DWC |

401(k) vs 403(b): Which Is the Best Choice for My Non-Profit?

Facts As the director of a not-for-profit organization, I’m looking at retirement plan options for our employees. The fiscal year ends June 30th and I’d love to implement something to benefit our ...
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DWC 401(k) Q&A: Do We Have to Consider Pay Before a Participant is Eligible When Calculating Company Matching Contributions?
DWC |

Do We Have to Consider Pay Before a Participant is Eligible When Calculating Matching Contributions?

Facts Each year, after our last payroll in December, I submit my census information to the TPA for our 401(k) plan. Even though I’ve looked at each participant’s total deferrals for the year to ...
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DWC 401(k) Q&A Question of the Week: Should We Include Government-Mandated Coronavirus PTO When Calculating Company Contributions?
DWC |

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

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 ...
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DWC 401(k) Q&A Question of the Week: How Do We Stop Our Discretionary Matching Contribution?
DWC |

How Do We Stop Our Discretionary Matching Contribution?

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 ...
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DWC |

Am I Now Required to Include Part-Time Employees in my 401(k) Plan?

Facts As the owner of a beachside hotel, I sponsor a calendar year 401(k) plan for my employees. In the summer we hire many part-time employees to assist with the uptick in guests and activities. Our ...
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QOTW - 6.18.2019 - How Can We Improve ADP ACP Test Results Without Offering Safe Harbor - Plan Compliance
DWC |

How Can We Improve ADP/ACP Test Results Without Offering Safe Harbor?

Facts My architectural firm sponsors a 401(k) plan. We have 38 architects and 2 administrative assistants. We currently provide a matching contribution to participants and, some years, a profit ...
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QOTW - 2.26.2019 - We Failed the ADP Test What Did We Do Wrong and How Do We Fix It - Plan Compliance
DWC |

We Failed the ADP Test! What Did We Do Wrong and How Do We Fix It?

Facts Our TPA just sent us our annual compliance report, and it says we failed testing! This is the first year we’ve failed anything, and now we’re being told that we need to take money out of the ...
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QOTW - 4.24.2018 - What is the Deadline to Correct a Failed ADP or ACP Test - Qualified Plan Compliance
DWC |

What Is the Deadline to Correct a Failed ADP/ACP Test?

Facts Every couple of years, our 401(k) plan fails the ADP/ACP test by a small margin. Since we don’t always fail the test, gathering our year-end census information to send to our TPA sometimes ...
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DWC |

Do 401(k) Testing Requirement Apply to Owner-Only Plans?

Facts I and my three business partners each own 25% of our company. We do not have any employees other than the four of us. We would like to set up a retirement plan, but we know there are ...
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