401k Profit Sharing Contribution Rules
am 10.03.2006 17:46:05 von woessnerI'm not sure if this is the right place to be posting, but here goes...
I've been tasked to investingate setting up a 401k plan at my office.
After a few lunch meetings, I'm pretty sure what we want, but I have
one lingering question. The owner would like to make profit sharing
contributions but only after 3 years of service. Is this possible or
would it likely fail the compliance tests?
As an alternative, I told him we could set it up so that an employee
would only be vested in the profit sharing contribution after 3 years,
but he said he would prefer not to make the contributions at all.
Background: We're a small research company with about 20 employees.
About half of our employees are highly-compensated. We have only 2
non-technical employees so the boss would like to keep this simple.
Thanks in advance for any advice and suggestions.
--Bill