question about entry date and payroll

[Lori H]

a plan has quarterly entry.

if a participant enters the plan on say Oct 1. which payroll should they commence deferring? for example if the payroll runs weekly 9/28-10/4 would they enter that pay period or the first full payroll following the entry date 10/5-10/12?

[QDROphile]

That would be for the plan document to say or the plan adminster to determine by interpretation, preferably expressed in written procedures.

[Lou S.]

I've always taken it to mean the first pay date after the entry date but I think as long as you have consistent administrative procedures you could do it either way.

[rcline46]

Personally, I do not think it is open to interpretation. That is why I have seen documents that specifically mention what pay period is used. If not mentioned then it has to be any pay remitted to the employee while a participant (if not using full year pay). It is not relevant when it was 'earned', only when 'paid'. If a person enters the plan on Oct 1, and Oct 1 is a paydate, then they should be deferring on that pay. Otherwise you have a failure to allow deferrals and an EPCRS incident.

Strong opinion to follow.

[Bird]

It is not relevant when it was 'earned', only when 'paid'. If a person enters the plan on Oct 1, and Oct 1 is a paydate, then they should be deferring on that pay.

I agree.

[QDROphile]

If the document states the terms, then there is no interpretation. But if the document does not, how would the adminstrator decide how to act other than by interpreting plan terms (which have proven to fall short in the detail)? You seem to be saying that not matter what the document says or does not say, the compensation with the first pay day in the quarter is subject to deferral. I do not think that is the only compliant answer.

[rcline46]

No, I have seen documents where the entry date is "first payroll period that begins on or after the first day of the plan year quarter". I know of NO system where you can program it to work, but there it is. However, I am crabby enough the if entry is 1st of..., the any pay date on or after "1st of..." must be included, eligible for deferral, whatever.

I am gentleman enough to consider what other meaning you think it may have.

[QDROphile]

I am no gentleman, but (1) there has been no specific text in the post to evaluate whether an interpretation is needed or the text is unambiguous, and (2) an interpretation of text that you partially supply and partially imply would not be unreasonable if it concluded that deferrals are permitted for compensation that has a pay day on or after the first day of the month in question.