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Volunteer Firemen


oldman
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A fire district is establishing a 401(a) plan that will provide employer matching contributions made in proportion to elective deferrals made to their 457(b) plan by their full-time employees. They also wish to provide for an employer discretionary nonelective contribution that would be made on behalf of “volunteer firemen”. These volunteer firemen are not W-2 employees, leased employees, or independent contractors. The contribution represents a bonus they earned as a result of their completion of courses certifying them as firemen.

Since these volunteer firemen are not considered common law employees of the employer, I do not believe they can participate in the plan.

What do you think?

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Only individuals who perform services for the eligible employer, either as an employee or as an independent contractor, may defer compensation under the eligible plan. Includible compensation of a participant means, with respect to a taxable year, the participant's compensation, as defined in section 415©(3), for services performed for the eligible employer.

PensionPro, CPC, TGPC

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Only individuals who perform services for the eligible employer, either as an employee or as an independent contractor, may defer compensation under the eligible plan. Includible compensation of a participant means, with respect to a taxable year, the participant's compensation, as defined in section 415©(3), for services performed for the eligible employer.

Pushing the "Like" button.

I think the question was referenced to the actual 401(a) plan being created in addition to the 457(b) plan. They're obviously not going to defer (since they have no Compensation), but it was proposed that they receive a "bonus" that gets deposited into the 401(a) plan.

Either way it looks to be a "no-go". :)

CPC, QPA, QKA, TGPC, ERPA

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