401k Eligibility

[RP]

Two questions:
I have/had two employees, (employee A) one that has been with me for four years and has just quit in June and another one that will have been with me for 3 years (employee B)  in August.

1. I have only just been made aware of the 401k rules, and it seems as if I should have made a plan available to employee A. What do I do now he has quit. Am I liable for any past payments?

2. I have spoken to employee B, and he says he would rather have the money in his pocket than in a 401k, in other words opting out. I have told him that I will give him the amount of what his contribution would be as a pay raise but not my matchable amount, unless he agrees to the 401k rules, and signs up. Is this allowed? Does he have to sign up?

Thanks,
RP

[Tom Poje]

more info needed.

there is no requirement at this time that a plan maintain a 401k plan (the govt would like every company to maintain some type of plan), so the question is whether you actually have a plan in the first place.

[Bird]

I think we can assume that RP has a 401(k) plan.

RP, are you the owner, and do you make 401(k) contributions for yourself? 

How many employees do you have?

Do you know if it is a safe harbor plan?  

It sounds like you don't have a third party administrator helping to run this plan, correct?

How did you set it up?  (Broker,  direct with financial institution...?)

[Patricia Neal Jensen]

Sounds to me like a good TPA is what you need.  This situation and others regarding this Plan are not designed for resolution by people who are not specialists.

Good luck!