Retirement/401(K) is a contributory plan to the employee’s retirement account. Both employee and employer contribute to the plan. This plan can ONLY be offered by EMPLOYER. However, the account is owned by the employee. Employees are responsible for choosing how contributions are invested.
This is an individual retirement account, employee only coverage. No spouse, domestic partner or child can share plan account (NO Benefit coverage for any of these dependents to the plan). However, an employee can assign anyone as a beneficiary.
Retirement benefit set up process includes the following sections:
- Policy Info (Standard - Same as other plan set up)
- Eligibility (Standard - Same as other plan set up)
- Contributions
- Additional Settings (Standard - Same as other plan set up.)
- Resources (Standard - Same as other plan set up.)
Contributions can be set up the same for all employees or can be based on employee groups such as locations, departments, job class etc.
The Internal Revenue Service (IRS) sets dollar amount limits to the amount that can be contributed to a 401K plan, both for employees and for employee and employer combined. This information will be listed on the page:
Employer Contribution: If the employer is contributing, toggle Employer Contributes button to Yes. Employer can contribute a flat dollar amount (ANNUAL) or the employer can match a percentage of employee’s contribution with an ability set up max contribution dollar amount.
If the employer chooses to contribute a flat dollar amount, they have the ability to prorate the contribution based on the employee's effective date.
Employee Contribution: Provide minimum and maximum employee’s ANNUAL contribution to enroll.
Employer Contributions for new hire (or mid-year enrollments) are calculated as pro-rated.