401(k) Plan Provisions That Are Good Ideas


I recently wrote an article regarding which 401(k) plan provisions are bad ideas. The provisions I listed were listed because I thought that they were plan features that could easily cause administrative errors that could threaten the tax qualification of the Plan and its trust. Now, I will take the positive side and mention plan provisions that 401(k) plans should have.

When it comes to 401(k) plans, so much is said about plan expenses, review of funds, investment policy statements, and fiduciary liability. What is forgotten about 401(k) plans is that in addition to being a retirement plan, it is also an employee benefit. So a 401(k) plan with features that encourage participation and accessibility to save for retirement is an employee benefit that could attract potential employees and retain current employees. The features that I think should be added to 401(k) plans if they currently aren’t current provisions would cost plan sponsors very little in administration fees and nothing in added contributions. Therefore, there will be no discussions of certain plan design features that increase employer contributions to plan participants like safe harbor or cross-tested/new comparability form of a profit sharing contribution. The only costs would be to amend the plan document. This article includes my suggestions on how a 401(k) plan can be optimized.

LOADING PDF: If there are any problems, click here to download the file.

Written by:

Published In:


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Ary Rosenbaum, The Rosenbaum Law Firm P.C. | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.