Topic Archive: Plan Eligibility

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

DWC | 07/17/18

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 he met those requirements.  He also received company matching contributions.

Read More

What Compensation Should We Use to Calculate Company Contributions to our 401(k) Plan?

DWC | 06/26/18

Facts

Our company has a safe harbor 401(k) plan.  In addition to employees making deferrals, we make a company contribution equal to 3% of each person’s compensation.  We deposit both types of contributions each pay period, so in theory at least, we should be all set by the end of each year.  However, it seems that each year, our TPA comes back to us with adjustments that need to made.  They tell us that it has something to do with how we determine compensation.

Read More

Can We Exclude Seasonal Employees From Our 401(k) Plan?

DWC | 02/27/18

Facts

Our company has a retail store that sells items like patio furniture, swimming pool supplies, and equipment. We also have a department that cleans and services swimming pools. The service department is much busier during the summer months, so we hire students to fill these seasonal roles while they are on break from school.

Read More
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.