Plan excludes "overtime" from compensation

[7806akp]

A plan excludes "overtime" from "compensation" for deferral purposes. Is "overtime" the full amount of pay (time-and-a-half) for any hour worked over 40 hours, or should "overtime," excluded from compensation for deferral purposes, include only the extra half pay for those hours worked over 40? There is no guidance in the plan document.

[QDROphile]

The plan administrator is responsible for interpreting plan terms. If the question is limited to deferrals, for a practical answer, one should look at how the payroll system functions with respect to application of the deferral election to the compensation for the extra hours.

[My 2 cents]

Inevitable question: What does the plan say? If it is clear, do what it says. If not, then the plan administrator must make a formal interpretation. Did nobody think of this when the plan was drafted to exclude overtime?

[Belgarath]

FWIW, my interpretation in the absence of specific document language would be all compensation for hours on which overtime pay is included. If you are getting overtime pay on all hours over 40, then to me, all of those hours are overtime, and you would exclude it all, not just the extra 50%.

[RatherBeGolfing]

FWIW, my interpretation in the absence of specific document language would be all compensation for hours on which overtime pay is included. If you are getting overtime pay on all hours over 40, then to me, all of those hours are overtime, and you would exclude it all, not just the extra 50%.

This would be my interpretation as well (in the absence of specific plan language or company policy)

[ETA Consulting LLC]

FWIW, my interpretation in the absence of specific document language would be all compensation for hours on which overtime pay is included. If you are getting overtime pay on all hours over 40, then to me, all of those hours are overtime, and you would exclude it all, not just the extra 50%.

This would be my interpretation as well (in the absence of specific plan language or company policy)

Agreed. They said overtime "pay" not overtime "premium"

Good Luck!

[K2retire]

Just one more reason that excluding compensation is usually a bad idea!