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

Forfeiture Account Gathering Dust? We’ve got a fix for that!

DWC 02/28/19

Q1 2019 COTQ Blog Header Image_Forfeiture Account Gathering Dusrt

With all the responsibilities that come with being a plan sponsor, not to mention a business owner, your plan’s forfeiture account probably doesn’t make it anywhere near the top of the priority list. More than likely, forfeitures are allocated to the account automatically by your plan’s recordkeeper following a participant distribution. Then, your ...

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

DWC 12/20/18

Q4 2018 COTQ Blog Header Image_Forgot to Timely Execute a Document Restatement

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.

Delinquent Deposits of Employee Deferrals? There's a Fix for That!

DWC 09/27/18

While it might not seem like that big of a deal if 401(k) deposits are made a couple days or weeks late, the Department of Labor (DOL) considers those payroll withholdings to be plan money on the deposit deadlines regardless of where the money is physically located. To the extent those monies are still in the plan sponsor’s control, the delayed ...

How Are Corrective Refunds Determined for a Failed ADP Test?

DWC 08/21/18

Facts Our 401(k) plan failed the ADP test for the first time this year. We decided to correct the failure by making refunds to the highly compensated employees instead of making additional contributions for the other participants. However, when we got the actual refund amounts from our TPA, we were surprised to see that those HCEs with the highest ...

How Do We Correct Missed Deferrals for New Hires?

DWC 07/31/18

Facts Our 401(k) plan allows new employees to make contributions on the first day of the quarter after they work for us for a year. All of our full-time employees have been with us for a long time. Most of our new hires are for short-term projects, so they almost always terminate employment in less than a year and never become eligible for our ...

An Employee Joined the Plan Too Soon: No Harm, No Foul or Failure In Need of a Fix?

DWC 07/17/18

QOTW - 7.17.2018 - Employee Joined the Plan Too Soon - Qualifed Plan Compliance

Facts In order to be eligible for our company’s 401(k) plan, employees must have worked for us for at least a year and be a minimum of 21 years old. They can join the plan on the next January 1st or July 1st following the date they meet those requirements. Recently, we discovered that we allowed an employee to start contributing to the plan before ...

Correcting a Failure to Withhold Deferrals from Eligible Compensation

DWC 06/28/18

Facts ABC Company maintains a 401(k) plan that includes the following provisions: It operates on a calendar year. Compensation is defined as W2 wages with pre-tax deferrals added back and no exclusions. Eligible participants can defer up to the IRS limit $18,500 + $6,000 for those age 50 or older (2018 limits, indexed for inflation) The company ...

How Should We Handle It If We Accidentally Overfund Our 401(k) Match?

DWC 02/20/18

QOTW - 2.20.2018 - How Should We Handle It It We Accidentally Overfund our 401k Match - Plan Corrections

Facts Our company sponsors a safe harbor 401(k) plan with a match, and we also make a profit sharing contribution each year. Our payroll company calculates match and profit sharing contributions along the way, and we fund both of those each pay period. This year, when our TPA calculated the total match and profit sharing contributions for the ...

10 Common Retirement Plan Compliance Failures Found by the IRS

DWC 10/2/17

Contrary to what some people may think while writing out checks for penalty fees, the IRS doesn't actually want to find compliance issues in retirement plans.

SchoolHouse Rock Meets The 401(k) Plan

Adam C. Pozek 04/22/13

When I was kid, I used to love Schoolhouse Rock during the commercial breaks of Saturday morning cartoons. Even now, I have them all on DVD as well as a CD of covers by various rock musicians, and I still sing along with all of them word-for-word!

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