401K and Highly Compensated Employees?

Greetings all,

We are having an issue with our 401K plan and a few highly compensated employees. After a certain point the 401K employer match stops being taken by payroll. I think the issue is related to the "Highly Compensated" flag on the "Plan Test" tab in HR11 but I'm not certain. I see there is a report, BN305, to list highly compensated employees but I am uncertain of the parameters.

Has anyone else faced this issue or can shed any light on this?

Thanks in advance

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Comments

unknown

It sounds like it could be the Maximum Compensation limit that is being hit. On the Vesting Comp tab of BN15 for the 401k plan, you'll see settings on how you can apply this rule or ignore it all together. Essentially, if the limit flag is set and the employee his hitting the Maximum Compensation you defined on BN12, DC contributions will stop. Hope this points you a possible solution.

unknown

It sounds like it could be the Maximum Compensation limit that is being hit. On the Vesting Comp tab of BN15 for the 401k plan, you'll see settings on how you can apply this rule or ignore it all together. Essentially, if the limit flag is set and the employee his hitting the Maximum Compensation you defined on BN12, DC contributions will stop. Hope this points you a possible solution.

Thanks, that helps a lot. The solution seems to be to set the "Apply Maximum Compensation limit" flag in HR11 to N.

d-wilcox

We've had this problem and our solution was to make sure on HR11.1 - Plan Test tab that both the Highly Comp field is checked to Yes and the Apply Maximum Comp Limit is N.

unknown

We've had this problem and our solution was to make sure on HR11.1 - Plan Test tab that both the Highly Comp field is checked to Yes and the Apply Maximum Comp Limit is N.

Thanks Carmen, that's exactly what we plan to do. It's great hearing someone else has had this issue and come to the same solution!

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