Illegal alien and testing

[Kimberly S]

Employer hires an individual who produces a Social Security card. Individual works long enough to meet 401(k) plan entry requirements, but declines to make salary deferrals. Employer learns, when uniformed officials appear at their door to deport him, that the individual is an illegal alien.

Do we include him as a zero in the ADP/ACP test?

He was still employed on the last day of the plan year. Is he due a top heavy minimum contribution?

[ERISAnut]

Yes & Yes.

You must follow the written terms of your plan.

[JanetM]

Make sure you have good forfeiture language in your plan. Now you have person who is deported to another country and you don't have valid name or SSN to figure out who to pay. You will now have missing participant on the books forever (unless you charge participant accounts directly for fees that will eventually eat up the balance).

[david rigby]

Several prior discussion threads on this topic. Recommended reading.

Try the Search feature with "illegal alien".