Guest Wahoo77 Posted March 17, 2003 Posted March 17, 2003 Can a 401(k) plan allow participants to make salary reduction contributions immediately upon employment, but require the participant to be employed for one full calendar year before being eligible for an employer (profit sharing) contribution? Does this create a 410(B) issue?
Blinky the 3-eyed Fish Posted March 17, 2003 Posted March 17, 2003 Yes. No. Just keep in mind that if the plan is top heavy, you will have to give 3% to those new hires. "What's in the big salad?" "Big lettuce, big carrots, tomatoes like volleyballs."
Guest Wahoo77 Posted March 17, 2003 Posted March 17, 2003 Thanks. Do you have a cite to a regulation or ruling that allows different service requirements for 401(k) contributions and employer contributions without running afoul of 410(B)?
Blinky the 3-eyed Fish Posted March 17, 2003 Posted March 17, 2003 Yes, 410(B). You won't run afoul of 410(B) because you are manditorily disaggregating the 401(k) portion and the nonelective portion of the plan. "What's in the big salad?" "Big lettuce, big carrots, tomatoes like volleyballs."
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