Employer won't contribute pre-tax from bonus?

[Guest goddude]

I will soon be receiving a yearly bonus from my employer, and I'd like to have a decent portion contributed to my 401k plan pre-tax. When I asked our payroll department about that, though, they said they wouldn't do it.

This is a sizable bonus that I was hoping to contribute pre-tax to my 401k so I could borrow against it for a down payment on a new house. Is there any way that I can force my employer to contribute part of it pre-tax?

Thanks in advance

[Jean]

You need to find out from your 401(k) administrator (i.e., HR dept rep?) what the rules are for salary deferrals from bonus payments and how to make a salary deferral instruction change. The payroll individual may not know the 401(k) plan rules.

It is common that plans require that a salary deferral from a bonus payment could be the same percent as from your general compensation. Some plans allow participants to make a separate salary deferral election for a bonus payment. But if it does not, and you are told the same rate will apply no matter what type of compensation you are paid, then simply increase your current salary deferral to an amount that will equal the dollars you want to defer by the end of your compensation year.

[david rigby]

Exactly. In other words, this is controlled by the plan provisions.

[Guest EricWings]

Requesting a Summary Plan Description (SPD) will help answer your questions if they still do not know.

[masteff]

It is possible that bonus is not included in the plan's definition of compensation. This is something you can learn from the plan administrator and/or the summary plan description.