What is 401(k) Plan Testing?
Plan sponsors must test traditional 401(k) plans each year to ensure that the contributions made by and for rank-and-file employees (non-highly compensated employees (NHCE)) are proportional to contributions made for owners and managers (highly compensated employees (HCE)). According to the IRS, ADP or Actual Deferral Percentage is an annual test in a 401(k) plan that […]
What is a 401(k) Record Keeper?
The primary purpose of a 401(k) plan record-keeper is to keep track of the plan money. Record-keepers are also responsible for maintaining the accounting of plan contributions and what they have earned. Record-keepers track which incoming dollars are which. All record-keeping function are typically provided online. In addition to tracking individuals’ assets, record-keepers often provide other plan […]
Advantages of Establishing a 401(k) Plan
A 401(k) plan is one of the most popular retirement savings vehicles available in the United States, offering numerous benefits that can significantly enhance an individual’s financial security in retirement. This employer-sponsored plan allows employees to contribute a portion of their paycheck to a retirement account, often with the added benefit of employer matching contributions. […]
