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Showing results for tags 'catch-up deferrals'.
Found 2 results
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We use Fidelity as our 401(K) Administrator that allows those age 50 or older to elect pre-tax/Roth and catch-up. The problem is that many of our employees are electing catch up when they will not be maxing out on their pre-tax/Roth IRS limit. We only match on pre-tax and Roth. This leaves us with the issue that what should be regular pre-tax or Roth is being captured as catch up in the payroll contribution side of things. We do not true up at year end or termination to ensure the match is correct so this is one issue. However, I believe this can be corrected with some rule built in to only deduct regular pre-tax and/or Roth until capped out and then catch up deductions would begin. But I am not having much luck selling this. Could anyone share how this is done in your system to avoid this type of issue? We use Workday payroll. Thank you!
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safe harbor 401(k) plan for medical practice has 3% SH NEC only to NHCEs. During 2018, physicians over age 50 deferred $24K rather than $24,500 due to clerical error by payroll person. Can they designate $6,000 as catch-up, leaving $18,000 to count toward their maximum annual addition of $55,000? Or do they have to count the first $18,500 as regular deferrals before counting any as catch-up? Trying to make room for increased profit sharing. Thanks!
