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Showing results for tags 'terminated employees'.
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I have a question regarding a safe harbor 401(k) established in August 2016. We set the effective date as of 1/1/16 to allow all enrolled employees at 8/1/16 the ability to receive a full year contribution into the plan. Prior to us establishing the plan, we had two employees terminate their employment (one in February and one in April of 2016). Now our Administrator is saying that because our effective date is 1/1/16, we have to provide a safe harbor contribution to the two terminated employees even though they were not employed when we established the 401(k) plan. Does this sound right? It does not make sense to me. Any help would be appreciated.
