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Short Plan Years... Lookback Years... What (and When) Are They and Why Do I Care?

DWC 02/11/20
Facts My company started a brand new 401(k) plan last year. We didn’t start the plan until July 1, and since we operate on the calendar year, our first “year” of the plan will only be the six-month period from the start date through December 31, 2019. Now, our TPA is asking us for the compensation we paid to each of our employees during the ...
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What is a Short Plan Year and What Does It Mean for My Deferrals?

DWC 11/12/19
QOTW - 11.12.2019 - What is a Short Plan Year and What Does It Mean for My Deferrals - Retirement Plan Design
Facts Our company operates on a calendar tax year, but our 401(k) plan runs on a fiscal year ending each June 30th. It is a real hassle to manage two different year-ends, so we asked our TPA about aligning the two. They said we could amend the plan to make that happen, but there is also something about it creating a short year which would require ...
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Is It Possible to Avoid an Audit for the First (Short) Year of Our Plan?

DWC 10/1/19
QOTW - 10.1.2019 - Is It Possible to Avoid an Audit for the First Short Year of Our Plan - Plan Compliance
Facts Our company has about 200 employees, and we launched a new 401(k) plan on October of last year. We were eager for all of our existing employees to get excited about this new benefit, so we waived the waiting period to join so that everyone would be eligible on day one. The good news is that it worked, and we had a lot of our employees sign ...
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Which Compensation Do You Use When Your Company Fiscal Year is Different Than Your Plan Year?

DWC 05/21/19
QOTW - 5.21.2019 - Which Compensation Do You Use When Your Company Fiscal Year is Different Than Your Plan Year - Plan Compliance
Facts When we set up our 401(k) plan, our partnership operated on a fiscal year that ran from July 1st to June 30th. We set the 401(k) plan year to line up with our company’s fiscal year. We recently changed our company’s fiscal year to follow the calendar year and didn’t think to notify our TPA to discuss the impact to the Plan. Now, they are ...
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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.

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