Author Topic: Why would company put a cap on 401k contributions???  (Read 10336 times)

lcerrito

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Why would company put a cap on 401k contributions???
« on: January 30, 2016, 07:36:21 AM »
I started work with a new company back in December and I was taken aback that they would only allow employees to contribute up to 15% of their pay to a 401k. They only match the first 4%, so it's not like the cap is there to prevent us from bankrupting the company...
At my current salary level, this puts me nowhere close to the $18,000 yearly limit, which is frustrating.

I spoke with HR about this, and I got a PC response that they benchmark their benefits with other companies and that they would certainly take a look at it next year but that honestly I was one of the only people who ever complained. Translation: they're not going to raise it. My previous employer allowed up to a 75% contribution per paycheck, which was great for maxing out the 401k early in the year.

Does anyone know why a company would limit how much an employee can contribute? Our plan is managed by Wells Fargo. I can't imagine it costs the company anything to allow employees to contribute more??? Any ideas on how to sway/nag them to raise it?

ender

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Re: Why would company put a cap on 401k contributions???
« Reply #1 on: January 30, 2016, 07:41:00 AM »
Give them a specific percentage to increase it to with justification. "I would like to increase it to 50%, because this allows me to better accomplish my financial goals. It should be a simple change on the administration side of things - how can we make this happen?"

My previous company only allowed 50% and after I asked about if it could be raised, a few months later we got a mass email saying something like "401k changes" allowing up to 75%. This is a company of 50k+ people.

It should be a simple change in a database somewhere, so be persistent.

MerryMcQ

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Re: Why would company put a cap on 401k contributions???
« Reply #2 on: January 30, 2016, 10:47:08 AM »
Sometimes plans run afoul of a high-income earner issue. The higher income earners at the company can't contribute more than the lower income earners. There's a nice fancy formula behind it, but maybe if you are one of the higher income earners, that's the reason?

Honestly it sounds like something else, though. Having run a 403b at a non profit, it took over a year to make a "simple" change to the plan. It involved having the retirement committee review and approve, then the CEO, then the plan lawyers review and approve, and finally the Board to approve. Then the plan document had to be amended and filed and etc etc. It was not a simple "change a number in a database" action. There are a lot of laws and regulations that govern retirement plans...

Tjat

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Re: Why would company put a cap on 401k contributions???
« Reply #3 on: January 30, 2016, 11:54:38 AM »
^^^

Companies under traditional 401k set ups do this to protect against nondiscrimination rules - which is when highly compensated employees contribute drastically more than lower paid employees. Fortunately, companies do have alternative options, which are 1) Auto-enroll employees in the 401k plan or 2) switch their plan to a "safe harbor" 401k. Of relevance, a safe harbor mandates companies provide a match (which removes the need for nondiscrimination testing).

Of course, another option is that your company plan is outdated and the cap was needed to comply with old expired tax laws. In that case, they could just remove it.

seattlecyclone

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Re: Why would company put a cap on 401k contributions???
« Reply #4 on: January 30, 2016, 01:02:07 PM »
I don't think this cap on contributions would actually help with the highly compensated employee testing.

"Highly compensated employees" (HCEs) are defined as people who earned more than $120k and are in the top 20% in compensation within the company.

The average percentage of salary that the HCEs put into the 401(k) is not allowed to exceed the average percentage that everyone else puts in by more than a certain amount.

If you're making over $120k, the 15% limit is mostly irrelevant to you since 15% of $120k is exactly the same as the $18k contribution limit. The 15% limit would then really only place a limit on the non-HCEs. This would make the plan more likely to fail the non-discrimination testing, not less. Why would you want to prevent a Mustachian non-HCE from putting in a large percentage of their salary to bring the average up?

Tjat

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Re: Why would company put a cap on 401k contributions???
« Reply #5 on: January 31, 2016, 07:46:14 PM »
Valid point. What I don't know is if non discrimination testing only cares about the 18k cap or considers the 53k max that employees + company contributions.

With This Herring

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Re: Why would company put a cap on 401k contributions???
« Reply #6 on: February 01, 2016, 07:59:49 AM »
The squeaky wheel gets the oil.  Is there anyone else you can encourage to complain?  Can you bring it up to a higher-up person in HR or maybe your boss?

Possible conversation with boss: "I really like working here, good experiences...blah blah... but the 401(k) percentage cap is so low, it really hampers my family's saving plans.  I only have so much time to save for retirement before kids start college/parents need expensive care...spouse has been pressuring me...  You may not have noticed with your higher income [there has to be a more polite way to phrase this], but it would really make a big difference to me if you could help me get this fixed."

2Birds1Stone

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Re: Why would company put a cap on 401k contributions???
« Reply #7 on: February 01, 2016, 08:09:44 AM »
I work for a large fortune 1000 company and they have the same cap in place.

I have along with dozens of colleagues, complained to no avail. It has been brought to the board/committee a bunch of times and always voted down. In my position it's even worse!

We are not only capped at 20% 401k contribution, but as sales people it's ONLY 20% of our base.

My comp plan is 45% base salary 55% commission. So I'm only able to contribute 9% of my total income!

JLee

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Re: Why would company put a cap on 401k contributions???
« Reply #8 on: February 01, 2016, 09:47:51 AM »
I work for a large fortune 1000 company and they have the same cap in place.

I have along with dozens of colleagues, complained to no avail. It has been brought to the board/committee a bunch of times and always voted down. In my position it's even worse!

We are not only capped at 20% 401k contribution, but as sales people it's ONLY 20% of our base.

My comp plan is 45% base salary 55% commission. So I'm only able to contribute 9% of my total income!

My last employer was a Fortune 500 company and our cap was 40%.

MDM

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Re: Why would company put a cap on 401k contributions???
« Reply #9 on: February 01, 2016, 03:57:31 PM »
I have along with dozens of colleagues, complained to no avail. It has been brought to the board/committee a bunch of times and always voted down. In my position it's even worse!
My last employer was a Fortune 500 company and our cap was 40%.

Has there ever been an explanation for the cap given by the company?  As the OP implied, there is no obvious reason....

JLee

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Re: Why would company put a cap on 401k contributions???
« Reply #10 on: February 01, 2016, 06:11:11 PM »
I have along with dozens of colleagues, complained to no avail. It has been brought to the board/committee a bunch of times and always voted down. In my position it's even worse!
My last employer was a Fortune 500 company and our cap was 40%.

Has there ever been an explanation for the cap given by the company?  As the OP implied, there is no obvious reason....

I haven't ever heard one.  My current company has a 50% cap.

dilinger

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Re: Why would company put a cap on 401k contributions???
« Reply #11 on: February 01, 2016, 07:36:31 PM »
Ask your boss for a raise.  Repeatedly.  Tell them that it's because you'd like to maximize your 401k each year, so you want to be making $120k a year.  Make sure you let them know that raising the 401k percentage would be satisfactory as well. :)

The only way to deal with a stupid bureaucracy is to have fun with it.

Undecided

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Re: Why would company put a cap on 401k contributions???
« Reply #12 on: February 01, 2016, 10:14:04 PM »
I don't think this cap on contributions would actually help with the highly compensated employee testing.

"Highly compensated employees" (HCEs) are defined as people who earned more than $120k and are in the top 20% in compensation within the company.

The average percentage of salary that the HCEs put into the 401(k) is not allowed to exceed the average percentage that everyone else puts in by more than a certain amount.

If you're making over $120k, the 15% limit is mostly irrelevant to you since 15% of $120k is exactly the same as the $18k contribution limit. The 15% limit would then really only place a limit on the non-HCEs. This would make the plan more likely to fail the non-discrimination testing, not less. Why would you want to prevent a Mustachian non-HCE from putting in a large percentage of their salary to bring the average up?

But deferred salary is only one of the metrics tested---after-tax and matching contributions are also tested.

MDM

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Re: Why would company put a cap on 401k contributions???
« Reply #13 on: February 01, 2016, 10:29:05 PM »
But deferred salary is only one of the metrics tested---after-tax and matching contributions are also tested.

Good point.  How is the contribution cap helpful toward those metrics?

Zamboni

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Re: Why would company put a cap on 401k contributions???
« Reply #14 on: February 01, 2016, 10:53:31 PM »
I used to work for a place with a 15% cap. Good luck in your quest!

Joel

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Re: Why would company put a cap on 401k contributions???
« Reply #15 on: February 01, 2016, 10:53:44 PM »
My wife's company had a similar arbitrary cap of 25% recently. I typed up an email where she referred to discussions with her CPA (me) where he asked why the company is limiting that to 25% when it prevents people below x salary to be able to contribute the full amount allowed by the IRS. Then we asked if they could change it. The HR person said it was the law, so I cited the IRS guidance showing the 18k limit. Then she responded and said that's their policy. That was in November. Around January 1st, she emailed my wife to let her know the limit was raised to 50% before the company publicly announced it.

With that said, ask hr and keep asking. Clearly explain why they should increase it and say that it affects people making under x amount which doesn't make any sense. I would like to believe I caused the change at my wife's company, but it might have just been good timing.

Undecided

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Re: Why would company put a cap on 401k contributions???
« Reply #16 on: February 01, 2016, 11:14:09 PM »
But deferred salary is only one of the metrics tested---after-tax and matching contributions are also tested.

Good point.  How is the contribution cap helpful toward those metrics?

It may be about the remedy for failing the test---if the company intends (or would consider) curing a non-compliant plan by contributing shortfall for non-HCEs, it limits the amount of shortfall it could face. Or it could be that the company knows from past experience that its non-HCE will hit 15% or close to it and the 15% limit gives it good chances of complying (especially if few HCE take much advantage of after-tax contributions).

MDM

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Re: Why would company put a cap on 401k contributions???
« Reply #17 on: February 02, 2016, 01:13:27 AM »
It may be about the remedy for failing the test---if the company intends (or would consider) curing a non-compliant plan by contributing shortfall for non-HCEs, it limits the amount of shortfall it could face.
How does that work?  Seems if there is a shortfall regarding non-HCE contributions, the shortfall would be reduced by allowing non-HCEs to contribute more.

Quote
Or it could be that the company knows from past experience that its non-HCE will hit 15% or close to it and the 15% limit gives it good chances of complying (especially if few HCE take much advantage of after-tax contributions).
Don't understand - complying with what?  Took a quick look at https://www.irs.gov/Retirement-Plans/A-Guide-to-Common-Qualified-Plan-Requirements but it was still not clear how suppressing non-HCE contributions can in any way help a company be compliant...?

2Birds1Stone

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Re: Why would company put a cap on 401k contributions???
« Reply #18 on: February 02, 2016, 06:12:01 AM »
I have along with dozens of colleagues, complained to no avail. It has been brought to the board/committee a bunch of times and always voted down. In my position it's even worse!
My last employer was a Fortune 500 company and our cap was 40%.

Has there ever been an explanation for the cap given by the company?  As the OP implied, there is no obvious reason....

Never given a real explanation. Believe me, I have pressed the issue as it is probably the only gripe I have with my employer!

Undecided

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Re: Why would company put a cap on 401k contributions???
« Reply #19 on: February 02, 2016, 07:39:10 AM »
It may be about the remedy for failing the test---if the company intends (or would consider) curing a non-compliant plan by contributing shortfall for non-HCEs, it limits the amount of shortfall it could face.
How does that work?  Seems if there is a shortfall regarding non-HCE contributions, the shortfall would be reduced by allowing non-HCEs to contribute more.

It's about the effect on HCEs, true, but see below for some problems with raising the limit on non-HCEs (but not HCEs), but realize that raising the limit on non-HCEs doesn't force them to contribute, and the company may know from experience that there may be little effect on increasing non-HCE contributions. If the company does fail a test, it can cure by making contributions for non-HCEs (it may, it may not), so capping HCE contributions limits also limits the amount the company may need to contribute to cure.

Or it could be that the company knows from past experience that its non-HCE will hit 15% or close to it and the 15% limit gives it good chances of complying (especially if few HCE take much advantage of after-tax contributions).
Don't understand - complying with what?  Took a quick look at https://www.irs.gov/Retirement-Plans/A-Guide-to-Common-Qualified-Plan-Requirements but it was still not clear how suppressing non-HCE contributions can in any way help a company be compliant...?

If the company knows in advance who the HCEs will be (not true at many companies with salesforces or other incentive compensation structures) and doesn't mind the employee-relations issue of having two separate limits, then I think you're right that there's no reason to limit non-HCE contributions. But those are both reasons why separate limits may not be practical. Maybe this company has no good reason for limiting contributions, but the presumption that there cannot be such good reasons is wrong. Definitely worth asking about, though. The OP should be able to find the plan officers for the 401(k) plan and ask them.
« Last Edit: February 02, 2016, 11:25:22 AM by Undecided »

MDM

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Re: Why would company put a cap on 401k contributions???
« Reply #20 on: February 02, 2016, 11:14:00 AM »
Maybe this company has no good reason for limiting contributions, but the presumption that there cannot be such good reasons is wrong.

Apparently we differ in our opinions of whether all decisions made in corporate America are guaranteed to be rational. :)

Undecided

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Re: Why would company put a cap on 401k contributions???
« Reply #21 on: February 02, 2016, 11:27:39 AM »
Maybe this company has no good reason for limiting contributions, but the presumption that there cannot be such good reasons is wrong.

Apparently we differ in our opinions of whether all decisions made in corporate America are guaranteed to be rational. :)

No, I'm certain that not all decisions made in corporate America are guaranteed to be rational---we agree there---but that doesn't mean there cannot be a rational basis for this particular decision.

MDM

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Re: Why would company put a cap on 401k contributions???
« Reply #22 on: February 02, 2016, 11:36:49 AM »
No, I'm certain that not all decisions made in corporate America are guaranteed to be rational---we agree there---but that doesn't mean there cannot be a rational basis for this particular decision.
Agreed that there may be a rational reason.  By the same token there may not be a rational reason.

Based on some amount of experience and investigation, I believe the latter is true but will happy rethink if given an example of the former.

Blonde Lawyer

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Re: Why would company put a cap on 401k contributions???
« Reply #23 on: February 02, 2016, 11:40:17 AM »
Could it have something to do with maintenance fees?  Just a shot in the dark here but I wonder if the Plan charges the employer different fees based on the different percents employees can contribute.

Edit: One other thought: could it be to protect employees that are really bad at math? If you have a low level employee that makes $25k/year who wants to put in $18k, after taxes, there would be hardly anything to live on.  They hear the advice to max your 401k but don't understand it wouldn't work for them yet? If so that would be a dumb reason but still a rational one at least.
« Last Edit: February 02, 2016, 11:42:55 AM by Blonde Lawyer »

Jack

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Re: Why would company put a cap on 401k contributions???
« Reply #24 on: February 02, 2016, 11:53:47 AM »
Could it have something to do with maintenance fees?  Just a shot in the dark here but I wonder if the Plan charges the employer different fees based on the different percents employees can contribute.

If that were the case, then the motivation for the employer would be in the opposite direction: 401k providers charge higher fees (relative to the assets under management) for small plans than they do for larger plans, so an employer who wanted lower fees would be motivated to allow employees to contribute more, not less.

Edit: One other thought: could it be to protect employees that are really bad at math? If you have a low level employee that makes $25k/year who wants to put in $18k, after taxes, there would be hardly anything to live on.  They hear the advice to max your 401k but don't understand it wouldn't work for them yet? If so that would be a dumb reason but still a rational one at least.

I hope not, because that's disgustingly fucking presumptuous. My wife is in a similar situation: she's a low-level employee and, if we could, we'd contribute literally 100% of her salary to the 401k because we live off my income instead. (She works part-time and isn't eligible for the 401k yet because her company's plan has a minimum number of hours you have to work before becoming so. I've been reading this thread in hopes it might help me understand her employer's perspective too.)

Undecided

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Re: Why would company put a cap on 401k contributions???
« Reply #25 on: February 02, 2016, 12:35:12 PM »
No, I'm certain that not all decisions made in corporate America are guaranteed to be rational---we agree there---but that doesn't mean there cannot be a rational basis for this particular decision.
Agreed that there may be a rational reason.  By the same token there may not be a rational reason.

Based on some amount of experience and investigation, I believe the latter is true but will happy rethink if given an example of the former.

I don't have access to companies' internal documents to give you an "example," but an illustration is to suppose the company doesn't know in advance who will be HCE and who will be non-HCE, and would cure a failed test by making contributions for non-HCEs. Limiting everyone limits the company's potential exposure in the amount of contributions it would have to make for non-HCE.

MDM

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Re: Why would company put a cap on 401k contributions???
« Reply #26 on: February 02, 2016, 12:55:01 PM »
Limiting everyone limits the company's potential exposure in the amount of contributions it would have to make for non-HCE.

Does it? 

Assuming an HCE makes $120K a 15% company imposed limit reduces the under-50 IRS maximum contribution by $0.

A 15% company imposed limit for a non-HCE making $40K reduces the under-50 IRS maximum contribution by $12K.

Seems this increases, not decreases, the company's potential exposure...?

Undecided

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Re: Why would company put a cap on 401k contributions???
« Reply #27 on: February 02, 2016, 01:16:19 PM »
Limiting everyone limits the company's potential exposure in the amount of contributions it would have to make for non-HCE.

Does it? 

Assuming an HCE makes $120K a 15% company imposed limit reduces the under-50 IRS maximum contribution by $0.

A 15% company imposed limit for a non-HCE making $40K reduces the under-50 IRS maximum contribution by $12K.

Seems this increases, not decreases, the company's potential exposure...?

In your example, assuming they each contribute the maximum and that the HCEs would contribute to deferral before after-tax contributions, then the HCE has a deferral contribution of 15% and the non-HCE has a deferral contribution of 15%. Neither has an after-tax contribution. So, the plan passes. Suppose instead the limit is 20%. The HCE makes a deferral contribution of 15% (maxing the $18,000) and the non-HCE makes a deferral of 20%; the HCE also makes an after-tax contribution of his or her remaining 5%. They pass the deferral test, but fail the contributions test and the company cures by making a 3% contribution for the non-HCE ($1,200), to get within 2% of the HCE's participation rate. Instead, say the limit is 30%. The non-HCE makes a 30% deferral, the HCE makes a 15% deferral (maxing the $18,000) and an after-tax contribution of his or her remaining 15%. The company would then have to make a 13% contribution for the non-HCE ($5,200) in order to cure the plan that way.

JordanOfGilead

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Re: Why would company put a cap on 401k contributions???
« Reply #28 on: February 02, 2016, 01:30:20 PM »
My last employer had no limit on contributions (I think it was actually 99% or 99.5%, just so that you would have SOME taxable income on each pay check) and I thought that the 80% limit at my current employer was strange.

I guess I will have to keep an eye on that kind of thing in the future.

Jack

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Re: Why would company put a cap on 401k contributions???
« Reply #29 on: February 02, 2016, 01:57:54 PM »
Limiting everyone limits the company's potential exposure in the amount of contributions it would have to make for non-HCE.

Does it? 

Assuming an HCE makes $120K a 15% company imposed limit reduces the under-50 IRS maximum contribution by $0.

A 15% company imposed limit for a non-HCE making $40K reduces the under-50 IRS maximum contribution by $12K.

Seems this increases, not decreases, the company's potential exposure...?

In your example, assuming they each contribute the maximum and that the HCEs would contribute to deferral before after-tax contributions, then the HCE has a deferral contribution of 15% and the non-HCE has a deferral contribution of 15%. Neither has an after-tax contribution. So, the plan passes. Suppose instead the limit is 20%. The HCE makes a deferral contribution of 15% (maxing the $18,000) and the non-HCE makes a deferral of 20%; the HCE also makes an after-tax contribution of his or her remaining 5%. They pass the deferral test, but fail the contributions test and the company cures by making a 3% contribution for the non-HCE ($1,200), to get within 2% of the HCE's participation rate. Instead, say the limit is 30%. The non-HCE makes a 30% deferral, the HCE makes a 15% deferral (maxing the $18,000) and an after-tax contribution of his or her remaining 15%. The company would then have to make a 13% contribution for the non-HCE ($5,200) in order to cure the plan that way.


So basically, what you're saying is that the Feds came up with a bass-ackwards rule that effectively penalizes lower-compensated employees in the name of "fairness" when they should have just treated after-tax contributions differently instead (even abolishing them entirely would have been a fairer solution, in my opinion).

MDM

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Re: Why would company put a cap on 401k contributions???
« Reply #30 on: February 02, 2016, 02:07:03 PM »
In your example, assuming they each contribute the maximum and that the HCEs would contribute to deferral before after-tax contributions, then the HCE has a deferral contribution of 15% and the non-HCE has a deferral contribution of 15%. Neither has an after-tax contribution. So, the plan passes. Suppose instead the limit is 20%. The HCE makes a deferral contribution of 15% (maxing the $18,000) and the non-HCE makes a deferral of 20%; the HCE also makes an after-tax contribution of his or her remaining 5%. They pass the deferral test, but fail the contributions test and the company cures by making a 3% contribution for the non-HCE ($1,200), to get within 2% of the HCE's participation rate. Instead, say the limit is 30%. The non-HCE makes a 30% deferral, the HCE makes a 15% deferral (maxing the $18,000) and an after-tax contribution of his or her remaining 15%. The company would then have to make a 13% contribution for the non-HCE ($5,200) in order to cure the plan that way.

Great - now we are getting somewhere that might be plausible.  Of course, for an HCE making $200K a 15% limit still allows after-tax contributions while more or less preventing a non-HCE from making any.

A company should also consider likely contribution scenarios.  E.g., HCEs have more disposable income so they are more likely to contribute higher amounts.  For non-HCEs who contribute less than the allowed maximum, the maximum itself is irrelevant.  But if there are non-HCEs who want to contribute more, the company-imposed maximum serves to decrease the average deferral percentage and make it more likely the company will fail the ADP test.

So if a company claims the percentage contribution limit is in place to avoid failing the ACP test, that might be true.  Asking HR to provide the company ADP and ACP results could be illuminating.

Undecided

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Re: Why would company put a cap on 401k contributions???
« Reply #31 on: February 02, 2016, 02:08:12 PM »
So basically, what you're saying is that the Feds came up with a bass-ackwards rule that effectively penalizes lower-compensated employees in the name of "fairness" when they should have just treated after-tax contributions differently instead (even abolishing them entirely would have been a fairer solution, in my opinion).

I think the idea was that if HCEs or the company suffered (by a limit on HCE contributions or by the company paying additional money on behalf of the non-HCEs), then they would encourage non-HCEs to participate. If they successfully encourage that participation, then they can raise the limit. Or they can avoid the tests by making it a safe harbor plan with matching or outright contributions.

MDM

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Re: Why would company put a cap on 401k contributions???
« Reply #32 on: February 02, 2016, 02:10:45 PM »
So basically, what you're saying is that the Feds came up with a bass-ackwards rule that effectively penalizes lower-compensated employees in the name of "fairness" when they should have just treated after-tax contributions differently instead (even abolishing them entirely would have been a fairer solution, in my opinion).

Also, there are different ways a company can proceed if it fails a test.  It can make contributions to the non-HCEs, or it can return the "excess" contributions of the HCEs.  See http://www.401khelpcenter.com/mpower/feature_030702.html.

lcerrito

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Re: Why would company put a cap on 401k contributions???
« Reply #33 on: February 02, 2016, 04:34:44 PM »
Thank you everyone for all your replies. I've used them to put together a list of all the possible reasons why they might not be offering a higher contribution percentage, and I will start pestering the benefits person with all of them tomorrow, lol.

My boss has been with the company for decades, and she had no idea that 15% was low. To her credit, she's been contributing the max 15% since she's been there.

Undecided

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Re: Why would company put a cap on 401k contributions???
« Reply #34 on: February 02, 2016, 05:51:41 PM »
Thank you everyone for all your replies. I've used them to put together a list of all the possible reasons why they might not be offering a higher contribution percentage, and I will start pestering the benefits person with all of them tomorrow, lol.

My boss has been with the company for decades, and she had no idea that 15% was low. To her credit, she's been contributing the max 15% since she's been there.

You may be able to find the name of the administrator of the plan (e.g., look on Brightscope or find the Form 5500 directly), and that may be someone who'd better able to consider the question "Would it be possible for the company to increase the percent-of-salary limit on 401(k) contributions?"

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Re: Why would company put a cap on 401k contributions???
« Reply #35 on: February 03, 2016, 10:30:15 AM »
No idea but could it have something to do with health insurance also coming out of a paycheck?  If someone has too high of a 401K deduction where there isn't enough money to pay for insurance, that seems like it would mess something up.

seattlecyclone

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Re: Why would company put a cap on 401k contributions???
« Reply #36 on: February 03, 2016, 11:23:12 AM »
No idea but could it have something to do with health insurance also coming out of a paycheck?  If someone has too high of a 401K deduction where there isn't enough money to pay for insurance, that seems like it would mess something up.

It's possible for payroll software to work around this by prioritizing things. My employer allows "100%" 401(k) contributions if you want, but what that really means is they take out payroll taxes and health insurance and HSA contributions and then put whatever's left in the 401(k).

tct

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Re: Why would company put a cap on 401k contributions???
« Reply #37 on: February 03, 2016, 01:50:56 PM »
a close friend of mine works for a large Dental Group. There is no % cap. He contributes the IRS maximum each year but always gets a check back at the end of the year with the explanation that he can't contribute that much because non-HCE employees didn't contribute similar amounts.