While many 401(k) plan participants jumped ship following the stock market’s plummet in late 2008, some have slowly been returning to the fold.
Strategy: Add an “automatic enrollment feature” to your 401(k). This will generally encourage those employees still on the bubble to participate in the plan. In turn, you may be able to stockpile more money for your own retirement.
The Pension Protection Act of 2006 (the PPA) included several provisions designed to accommodate such plans. New final regulations issued in 2009 provide additional guidance.
But here’s the rub: To qualify for the tax benefits, the plan can’t discriminate in favor of highly compensated employees (HCEs).
The 401(k) plan must meet the participation and vesting rules applicable to all qualified plans. In addition, it must pass an actual deferral percentage (ADP) test for pretax contributions and an actual contribution percentage (ACP) test for ...(register to read more)