Bonuses and Dollar Amount Deferrals

[Guest shm3803]

One of my plans includes bonuses in the definition of compensation and does not allow for special deferral elections to be made on bonuses. What happens if a participant elects to have a certain dollar amount deferred from each paycheck and that amount is greater than their actual bonus will be? For example, participant defers $300.00 per pay period. Bonus is only going to be $200.00. Does the entire bonus have to be deferred?

Thanks!

[MSN]

I would withhold all of the bonus that is left after mandatory deductions.

[hr for me]

One of my plans includes bonuses in the definition of compensation and does not allow for special deferral elections to be made on bonuses. What happens if a participant elects to have a certain dollar amount deferred from each paycheck and that amount is greater than their actual bonus will be? For example, participant defers $300.00 per pay period. Bonus is only going to be $200.00. Does the entire bonus have to be deferred?

Thanks!

What does the election form state? -- "from each paycheck" like you first stated ? Or"$300.00 per pay period" as you stated after that? If it is truly pay period, I would argue that unless the bonus comes before the paycheck, you already taken the $300 for the pay period, then you would not take more. If it is per check, then yes, the whole check would need to be deferred.