Disadvantages To Employer

A. Discrimination testing is required.

B. Employer must notify employees if they exceed limits.

C. If the plan is "top heavy," this will require the employer to make a contribution of up to 3% on behalf of all eligible employees if any "key employee" defers 3% or more of pay.  If the highest deferral of a "Key Employee" is less than 3%, then the employer need only make a contribution for all employees equal to such lesser percentage.
 

The Basics
Advantages to Employer
Disadvantages to Employer
Disadvantages to Employees

This document was last modified on July 27, 1999 by LMLeber

Copyright ©1999, The Jacobs Company, All Rights Reserved