Chris123 Posted May 11, 2021 Posted May 11, 2021 So my question is concerning an employer who would like to give his employees money when the plan starts (after meeting the eligibility requirements). This is a 401(k) Profit Sharing Plan, and this would be money that he is giving them as bonus or profit sharing from prior work they have done. Is this possible and are there limitations on how much he can give to each employee? The employer would like to give the employee that have been with him the longest a little more. I'd appreciate any feed back.
Belgarath Posted May 11, 2021 Posted May 11, 2021 Short answer, yes, it is generally possible. There are a LOT of plan document and design issues that must be addressed, including compensation period and compensation definition, coverage/nondiscrimination issues, 415 limits, effect on top heavy, etc., etc. Bill Presson and Luke Bailey 2
Jakyasar Posted May 11, 2021 Posted May 11, 2021 plus the profit sharing provisions in the plan Bill Presson 1
Gilmore Posted May 12, 2021 Posted May 12, 2021 Be sure to check for accrual requirements, like a last day rule, too.
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now