Each Monday 401kBasics posts a new tip as a part of our series “Plan Sponsor Quick Tips”. This series is designed to assist plan sponsors in filling their fiduciary role and running their retirement plan efficiently. Your feedback or suggestions on future articles is welcome.
Nondiscrimination testing is performed on qualified plans to ensure that all participants benefit fairly. In this article we will explain the 402(g) limit, corrective measures and it’s deadlines:
- The 402(g) limit is an annual limit that an individual can defer into the plan.
- Roth and pre-tax contributions are used to determine if the limit has been reached.
The 402(g) limit excludes catch-up contributions. All excess deferrals should be refunded before April 15th of the year following the year in which the elective deferrals were made. Please consult your service provider for more information.
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