JAS3 Posted August 27 Share Posted August 27 Hello! An employee was terminated August 15, 2024. She will receive 2 months of severance pay. The Simple Plan is through Schwab and just a standard prototype plan along with Form 5305. It is unclear by the definition of compensation if deferrals and the match are required on the "severance pay". Any information would be helpful! Thanks! Link to comment Share on other sites More sharing options...
CuseFan Posted August 27 Share Posted August 27 If it is truly severance pay - pay given after termination of employment to which the person would not otherwise had been entitled to - then it is not considered compensation for retirement plan purposes and should not be considered for deferrals or matching contributions. Bill Presson 1 Kenneth M. Prell, CEBS, ERPA Vice President, BPAS Actuarial & Pension Services kprell@bpas.com Link to comment Share on other sites More sharing options...
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