order of deductions

[K2retire]

We have a new client who is just adding Roth to their plan. Their payroll folks are asking about the order of deductions for people who might not have enough income to cover all deductions. Currently they are deducting pre-tax deferrals first, voluntary after tax second, then other things such as health insurance.

My gut reaction is that deferrals of any sort should be calculated first, but if there is a shortage the health insurance should be paid first. I'm also inclined to put Roth after pre-tax and before voluntary after tax. But I have no basis for those opinions.

Where would one look for an answer to such a question?

[GMK]

Here's a discussion from a few years back. Post 5 comments on selecting an order of priorities.

http://benefitslink.com/boards/index.php?/topic/29626-what-should-we-do-if-an-employees-paycheck-isnt-big-enough-to-make-his-or-her-deferral-election/#.VAnij-lOVaQ

So, the plan determines its priority list and communicates it to participants, possibly with a general handout, and at least whenever they elect or change their deferral rate.

[K2retire]

Thanks!