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401(K)

Under section 401(K) of the Internal Revenue Code, a deferred compensation plan set up by an employer so that employees can set aside money for retirement on a pre-tax basis. Employers may match a percentage of the amount that employees contribute to the plan. Contributions by both employees and employers, as well as investment earnings and interest, are not taxed until the employee withdraws the money; if the employee withdraws the money before retirement age, he or she pays an early withdrawal penalty tax. Currently, employees are allowed to annually contribute up to 15 percent of their salary but no more than $11,000 ($12,000 for people 50 or older). Many employers now offer these deferred compensation plans in lieu of or in addition to pensions.
References in periodicals archive ?
ALLOWABLE ROLLOVERS FROM ROTH 401 (K)S Direct rollover (trustee-to-trustee All or any part of the plan transfer) balance can go to another Roth 401(k), Roth 403(b), or to a Roth IRA, if the receiving plan allows.
401 (k) plan, the "missed deferral" is the participant's compensation multiplied by the ADP of the comparable discrimination testing group (highly compensated or nonhighly compensated) for the year at issue.
If a married 401 (k) participant applies for a loan, you must inform the spouse of the loan in writing, and the spouse must give his or her written consent within 30 days after receiving the notice.
Right now, the economics of 401 (k) service providers aren't working.
You'll find a host of 401 (k) plan providers - from commercial banks to insurance carriers to mutual fund companies.
401 (k) plan benefit under die plan for that plan year.
401 (a) qualified plan nondiscrimination rules apply to Sec.
401 (a) (9) (B) and the regulations thereunder provide rules for determining required distributions when an employee dies before his entire interest in a plan is distributed For distributions not begun before the employee's death, distributions to the designated beneficiary generally may be paid over the life or life expectancy of the beneficiary and generally must begin no later than one year after the employee's death (Sec.
401 (k) plans gained popularity in the early 1980s, executives have tried to devise ways to make the maximum elective deferral allowed under law.
401 (k) plan and enabling executives to maximize their contributions to the Sec.
401 (k) or an elective deferral simplified employee pension (SEP) plan must have established such plan before July 2, 1986.