Watch that bonus deferral election

Ary Rosenbaum
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Ary Rosenbaum - The Rosenbaum Law Firm P.C.

When there is a plan restatement process, every retirement plan document provider adds some tweaks and removes some tweaks from their plan document.

For the Cycle 3 restatement process, I’ve noticed that most plan documents have removed the separate bonus deferral election that could allow participants a separate election where they could defer up to 100% of their bonus (not that I ever got one).

So if a plan sponsor has the election or still allows the same treatment of bonus deferrals like they do ordinary deferrals, I think now is the time to see what they’re doing and what they should be doing with the plan statement process underway.

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.

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