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2 responses to “Are 401k Plan Sponsors Poised to Cut a Popular Feature?”

  1. Harold

    The only issue I see is that plan sponsors earning over the $260,000 compensation limit (2014) will not receive their full match since the deferral % without catch-up is 6.73% and 8.84% including catch-up. This may be a deterrent for plan sponsors. Additionally, many sponsors have difficulty identifying any excess over the match limit for compensation in excess of $260,000 (2014). Now, they will have to monitor the match limit as well the reduced match limit for contributing less than the matched amount. So, a plan with a $.50 match up to 6% of compensation has a HCE who receives a 2014 match of $8,750 because compensation is $500,000. This must be adjusted down to $7,800 to comply with compensation limits. Now, applying a $.25 up to 12% match would limit the HCE down further to $4,375 (w/o catch-up) & $5,750 (w/ catch-up) respectively because deferral % is not maximized.

  2. 11/06/2013 | The Morning Pulse

    […] Are 401(k) Plan Sponsors Poised to Cut Matching Contributions? […]

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