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How Do Furloughed Employees Impact Our Plan at Year-End?

DWC 11/17/20
Facts Like many businesses, we had to furlough some employees earlier this year in response to the coronavirus shutdowns. We’ve been fortunate enough to bring back a few of these employees, but a number still remain in limbo. As we approach year-end, we’ve started wondering how this might affect our 401(k) plan and potential company contributions.
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Are There Plan Design Options We Should Consider as Part of the Mandatory Cycle 3 Plan Document Restatement?

DWC 11/10/20
Facts We’ve been following your recent posts about how making even small changes to certain plan provisions can make managing the plan easier without sacrificing our objectives. Making life easier, while minimizing chances for errors…you’ve really been speaking our language.
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Does Counting Hours of Service for Plan Eligibility Have to be a Nightmare?

DWC 11/3/20
Facts We’ve been following along with the last few Questions of the Week and think we’re pretty comfortable with how we want to set up eligibility for our 401(k) plan. We’re definitely looking to implement a one year of service requirement (with 1,000 hours during that year) and quarterly entry dates. We understand that this design may result in ...
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What's the Simplest Way to Set Up a One Year Eligibility Waiting Period for our 401(k)?

DWC 10/27/20
Facts We are looking to set up a 401(k) plan for our company. Our workforce includes both hourly and salaried employees as well as full-time, part-time, and seasonal workers. For now, we really want to focus on our full-timers. It is our understanding that the maximum timeframe we can have employees wait before becoming eligible is one year. With ...
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How Can We Tweak Our Plan's Eligibility Requirements to Make Administration Easier?

DWC 10/20/20
Facts We’ve sponsored our 401(k) plan for several years now, and it’s been very well-received by our employees. Believe it or not, though, one of the biggest challenges we have had is around when employees become eligible. Some of our staff are salaried, while others are hourly. We have both part-time and full-time employees, and we are also ...
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How Can We Add More Flexibility to our Standard Profit Sharing Contributions?

DWC 10/13/20
Facts We have made profit sharing contributions each year, and we plan to continue to do so every year that our financial situation allows. Historically, we have contributed the same percentage of pay for each person, but your previous Question of the Week about using the profit sharing feature to reward certain key performers piqued our interest.
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Can We Tweak our 401(k) to Allow Additional Savings for Reasons More Immediate than Retirement?

DWC 10/6/20
Facts Our company takes a holistic approach to the benefits we offer. We want our employees to have access to benefits that assist them with their overall financial security. We offer several health insurance options as well as a 401(k) plan with company match. We would also like to make it easy for our employees to set money aside for other ...
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Are Discretionary Matching Contributions Becoming a Little Less...Discretionary?

DWC 09/29/20
Facts My company has sponsored a 401(k) plan for many years, and it provides for a discretionary matching contribution. I’ve always sought to build in as much flexibility as possible, so having discretion not only in how much we match each year and when we make those contributions (each pay period, monthly, etc.) has worked well for us. I recently ...
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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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Can a Former Employee Roll a Coronavirus-Related Distribution Back into our Plan?

DWC 09/15/20
Facts Earlier this year, we decided to make the CARES Act coronavirus-related distributions (CRDs) available to participant in our 401(k) plan. We know that it is possible for participants to repay CRDs, but we didn’t anticipate any would be interested in that option. We’re glad that some do now want to repay, but we want to be sure we handle ...
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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.