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Showing results for tags 'Bonuses excluded comp def'.
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401(k) plan excludes bonuses from the definition of compensation for deferral purposes. Employer is considering adding a safe harbor match formula dollar for dollar up to 4% computed each semi monthly payroll period, and to make the matching contribution at the same time as deferrals are posted. In this case, is the definition of compensation for computing the safe harbor match the same as the definition for deferrals? I assume it would be, otherwise your matching contribution amounts would be greater than your deferral amounts for some employees. If this is true, the match would be less expensive than the 3% across the board non elective safe harbor type of contribution, since I assume that formula cannot exclude the bonuses. Assume both definitions of compensation meet 414(s).
