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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 ...
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Are Rehires Immediately Eligible for our 401(k) Plan?

DWC 11/19/19
Facts We just rehired an employee that used to work for us but who terminated almost 4 years ago.  She was eligible for our 401(k) plan during her previous tenure but took a distribution of her account shortly after she left.
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Is It Possible to Split Eligibility to Allow for Deferrals but to Postpone Safe Harbor Contributions?

DWC 10/29/19
Facts We allow new employees to join our 401(k) plan on the first of the month after they are hired.  They become eligible to make deferrals and also receive the company safe harbor contribution at that time.  We don’t have high turnover, but employees who leave often do so within the first year of joining us.  We don’t mind allowing new hires to ...
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Who are Leased Employees & Are They Eligible for my 401(k) Plan?

DWC 04/16/19
Facts I own a small manufacturing company that specializes in office supplies, and I sponsor a 401(k) plan for my employees. One of my former employees, Tim Halpert, worked full-time with me for the past several years but recently left to work for a staffing agency called Prestige Worldwide.  Tim was a great employee for many years, and Prestige ...
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What Common Compliance Issues Should We Be Watching For?

DWC 03/19/19
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.
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Are RMDs Required for a Retiree Turned Independent Contractor?

DWC 11/27/18
This QOTW has been updated to reflect changes made by the SECURE Act, which was signed into law on December 20, 2019. Participants who were born on or before July 1, 1949, are required to start taking their RMDs in the year they turn 70 ½.  Those born after that date are subject to RMDs on reaching age 72. Facts We have an employee who attained ...
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Can We Change our 401(k) Plan Eligibility Requirements to Exclude Employees Who Have Already Joined?

DWC 10/9/18
Facts Our company has quite a few employees who only work a few hours each week.  When we setup the 401(k) plan, we wanted to allow all our employees to save, so we set the eligibility requirement at the first day of the month following an employee’s hire date.  Unfortunately, hardly any of our part-timers are contributing, and it has become ...
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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 ...
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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 ...
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Can We Exclude Seasonal Employees From Our 401(k) Plan?

DWC 06/5/18
Facts Our company’s workload fluctuates throughout the year with big spikes during the summer. As a result, we often hire seasonal workers who help us out during the busy times, but do not work during the regular workload months.
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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.