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

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

DWC 08/27/20

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, with that creativity comes added layers of testing and compliance to concern yourself with. And, if you sponsor a safe harbor plan, those rules can ...

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 ...

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

DWC 07/28/20

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 mentioned that we cannot really give employees the choice between higher pay or a profit sharing contribution, but we would like to explore ways to use ...

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

DWC 06/23/20

DWC 401(k) Q&A: 401(k) vs. 403(b) - Which Is the Best Plan Design for My Non-Profit?_Retirement Plan Design

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 employees beginning with the new year.

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

DWC 06/9/20

DWC 401(k) Q&A: Do We Have to Consider Pay Before a Participant is Eligible When Calculating Company 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 determine the matching contributions, the TPA almost always has true-up contributions for me to make. Taking a closer look, it seems like these true-ups ...

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 ...

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

DWC 01/28/20

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 plan has always required employees to reach age 21 and complete a year of service before becoming eligible. Traditionally, this has meant that these ...

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

DWC 06/18/19

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 sharing contribution too. I’m reluctant to utilize a safe harbor design, because I really value the vesting schedule on our employer contributions to help ...

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

DWC 02/26/19

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 plan in order to remedy the failure. I don’t understand why this is happening.

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