Log in

Retroactively Decided Not to Make Safe Harbor Contributions for Your HCEs? We've Got a Fix (or Two) for That!

DWC 05/28/20
If you’ve been with us for a while you’ve heard us say a few things time and again.  First, the rules and regulatory agencies do not allow plans to disproportionately favor highly compensated employees (HCEs) relative to the non-HCEs.  Second, a plan sponsor must be very careful about how and when it implements or removes benefits from the plan.  ...
Read More

Can We Suspend our Safe Harbor Contribution Mid-Plan Year?

DWC 03/24/20
Facts Given the current uncertainty in the world economy and the unknown ongoing affects of coronavirus, I’m looking at all financial obligations for our company, and for opportunities to reduce risk.  We currently sponsor a 401(k) plan for our employees and provide a safe harbor contribution equal to 3% of employee compensation.
Read More

Have the Rules for Safe Harbor 401(k) Notices Changed?

DWC 03/3/20
Facts My company sponsors a safe harbor 401(k) plan and every year my TPA sends me a reminder to distribute a notice to participants.  It’s not the biggest hassle but I’ve wondered if it’s really necessary that this same information be provided to participants each and every year.
Read More

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 ...
Read More

DWC News Update | Two Years in the Making: The Final IRS Hardship Distribution Regulations Are Here

DWC 10/24/19
It’s been a while, but we finally have them! Late last month, the IRS published the final hardship distribution regulations, nearly two years after Congress passed the Bipartisan Budget Act and the Tax Cuts and Jobs Act. The good news is that this final version follows the proposed version very closely. So closely in fact, that the IRS outright ...
Read More

Are We Required to Make Safe Harbor Contributions for HCEs?

DWC 10/22/19
Facts My company sponsors a safe harbor 401(k) plan so that all of the highly compensated employees can maximize their deferrals without worrying about failing the ADP test each year.  Although we fully intend to make the same level of contribution for the HCEs that we do for the non-HCEs, we would prefer to not to be required to do so in order to ...
Read More

Is There a Plan Design that Combines the Benefits of Automatic Enrollment and Safe Harbor?

DWC 10/15/19
Facts My company sponsors a 401(k) plan, and we fail the annual ADP test pretty consistently.  We really want to increase participation; not only to help our test results, but also to encourage our employees to save for retirement.  Automatic enrollment would help with participation, but we would have to set the default rate too high in order for ...
Read More

What is Automatic Enrollment and How Does it Work?

DWC 09/17/19
Facts Our company sponsors a 401(k) plan, but very few of our participants are contributing.  We started the plan as an added benefit to help attract and retain employees, but we also truly want to encourage our employees to save for retirement.  I’ve heard a lot about something called automatic enrollment and how it can be a great tool to get ...
Read More

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.
Read More

What is the Deadline to Implement a Retirement Plan for the Current Year?

DWC 08/13/19
UPDATE | This QOTW has been updated to reflect changes included in the SECURE Act, signed into law on December 20, 2019. The updated article is available here. Facts Returning from sunny days at the beach, I’ve begun discussing my company’s year-end financial projections with my accountant.  Those conversations have been about as fun as a sunburn; ...
Read More

Categories

See all

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.