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Posted by Golden California Girls on May 10, 2007, 10:25 pm
Please log in for more thread options Allan Martin wrote:
>>>> I've tried. Really. But I just can't figure out how to set up the
>>>> company match to our new 401K 'safe harbor' plan.
>>>>
>>>> Our company will match up to 4% of an employee's wages. If the employee
>>>> selects to withhold 1-3%, we match dollar for dollar. At 4% we match
>>>> 3.5%, at 5%, we match 4%.
>>>>
>>>> All this I can understand - set up a company match percentage default,
>>>> and change it for those who do not take the full 5%.
>>>>
>>>> My confusion is where folks have entered a weekly dollar amount to
>>>> deduct.
>>>>
>>>> It's obvious to me that if the dollar amount equals or exceeds 5% of the
>>>> workers salary, a straight percentage in company match item will work.
>>>>
>>>> But, for amounts that fall UNDER a full 5% of pay, how do I default the
>>>> match? What percentage do I enter into the QB company match payroll
>>>> item?
>>>>
>>>> Must I hand calculate the percentage of salary that the employee's
>>>> dollar amount represents - and THEN decide what to enter into company
>>>> match?
>>>>
>>>> How do I ensure that the amount the company contributes does not exceed
>>>> the amount the employee has contributed? If QB will cap the match to the
>>>> employee contribution, then I suspect a default of 3% in company match
>>>> might work.
>>>>
>>>> Any help would be welcome.
>>> Request from management that employees should always be required to
>>> stipulate a percentage to defer not a fixed dollar amount.
>>>
>> Yah.
>> Shoulda thought of that before the folks from the investment group came by
>> and explained the parameters to all the employees.
>>
>> Management is unlikely to change it all now, as I just hate extra
>> paperwork.
>
> Is the employer matching based on a single weeks payroll or should you be
> looking back to the beginning of the year to determine the YTD percentage? I
> suspect the calculation may require a whole lot more than you realize.
Yes, you need a copy of the master plan document. I would be surprised if it
wasn't on a per pay period basis, but until you read it and the IRC ...
And as far as QB, it either matches or it doesn't. No partial match. And I
don't think there is a way to set up multiple items to do it either.
My suggestion, tell management to get an outside payroll service and let them
set up the custom programming needed for that 401(k) that management bought.
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