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BellaBee41

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  1. Hi All, We recently came across a situation at work regarding HCEs. Since I started working at this company last year, New Hire executives and above that are “considered” a highly compensated employee is excluded from participating in the plan, meaning those we hire with a salary over $155K for 2024. Per the IRS definition, determination depends on if the employee was a 5% owner in the current testing period or the 12 months preferring the testing period OR if they earned greater than $155K in 2024. Im our plan documents state that HCEs are excluded from the plan. My question is, should they be eligible to participate in the 401k plan as a new hire (assuming they meet the eligibility requirements for the plan)? And then in the following year for 2025, determine their eligibility based on their actual gross compensation for 2024? Just confused if we should be allowing them to enter the plan at all in their first year.
  2. Thanks Paul! The reason was because they had their paychecks voided/reversed after the funds were already deposited into their 401(k) accounts.
  3. Hello, In a recent audit, we discovered some errors that my employer made to participant accounts. Basically, some accounts were overfunded. The overfunded amounts are between $10-$1300) so we need to recoup those funds. Aside from informing the employee of the error, are we required to obtain their authorization to pull the funds from their account due to an employer’s mistake?
  4. Hello. We have an employee requesting a hardship withdrawal to prevent eviction/foreclosure of a mortgage on their primary residence. The documentation provided shows a mortgage statement under someone else’s name, however the address matches the participant’s ID and he considers it his primary residence. Not sure how the two are related, but perhaps it’s a relative or partner in which I assume he pays rent to (although there is not lease or rental agreement). My question is: can we approve this? Here is the safe harbor definition: “payments necessary to prevent the eviction of the employee from the employee’s principal residence or foreclosure on the mortgage on that residence.”
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