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Can We Add a Safe Harbor Provision While Maintaining Flexibility in Contribution Costs?

DWC 09/22/20
Facts We currently sponsor a 401(k) plan and have been debating adding a safe harbor provision for 2021. While the idea of buying our way out of the ADP/ACP tests is appealing, we’re nervous about the idea of a mandatory contribution. If cash flow isn’t what we expect in a given year, we don’t want to be stuck with expensive contributions.
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What Are My Options (and Deadlines) for Implementing a Retirement Plan This Year?

DWC 08/11/20
Facts We’ve been debating implementing a 401(k) plan for 2020. After much back and forth, we’ve decided its “a go!” for this year. Since we are still in a more relaxed summer vacation mode, we’d like to wait until sometime this fall to really get rolling on implementation.
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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 ...
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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 ...
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Just Can't Get Enough...Savings from your 401(k) Plan

DWC 07/23/20
  Now that we know the basics, we can apply our knowledge to (almost) real life scenarios. We will follow our fictitious company: Robert Smith, Inc., an S-corporation with no employees other than the owner. Robert is an accomplished song writer who is currently living off royalties from his hits. Robert sponsored a SEP for many years, then at the ...
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Can We Increase Profit Sharing Contributions and Decrease Salaries to Improve Testing and Save Money?

DWC 07/21/20
Facts We want to make job offers to some new employees and are looking strategically at our overall compensation package. Some of these candidates are seeking upwards of $130,000 which will make them highly compensated employees (HCEs) in 2021. We are thinking about negotiating a lower salary of $100,000 with a promise of $30,000 in profit sharing ...
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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.
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Your Safe Harbor Actually Isn't? We've Got a Fix for That!

DWC 08/22/19
We’ve been through a few Corrections of the Quarter together now, and we appreciate you being along for the ride.  We feel this is pretty good stuff but, at the heart of it all, we’re pension geeks (no point in hiding it).  And while the rules and regulations get us going, we have a geeky passion for the opportunity to find creative solutions.
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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 ...
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Retirement Planning & Regulatory Trends You Should Be Watching

DWC 08/16/18
Feeling out of the loop on industry happenings this summer? DWC stays on top of what's trending, and our self-proclaimed pension geeks often offer their insights in industry publications. Get caught up with this month's round-up: 
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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.