As 401(k) plans can fall into the trap of being almost exclusively enjoyed by company owners and officers, it is important to understand how your role as a plan participant or plan collaborator can impact the plan as a whole. Your actions and understanding of non-discrimination testing can help make informed decisions on the plan and keep the plan in compliance.
What can plan sponsors and plan collaborators do?
Guideline helps sponsors and plan collaborators make informed decisions based on the information available. The testing status and results are displayed on the Compliance Status page of the Guideline dashboard, and our Help Center has many relevant articles. Our plan administrator support team are always happy to answer questions.
We understand that it can be frustrating when you are unable to contribute as much as you would like. Especially when you are responsibly prioritizing retirement savings. In addition to discussing other savings options with a financial advisor, consider speaking with your employer about switching to a safe harbor plan or using a discretionary match to stimulate broader participation.
What can I do as a participant?
- Guideline actively monitors compliance throughout the year, however changes in participation and employee base make exact predictions impossible. Plan to contribute to your 401(k) evenly over the course of the year to avoid dramatic contribution changes. This will allow Guideline to better assess risk and help you to maximize any matching your plan offers.
- Educate your colleagues. If employees collectively save more, Highly Compensated Employees (HCEs) can also save more. Help educate employees who may not be participating in the benefits of 401(k) savings. The Resource Library in your participant dashboard offers many resources, such as the Video Library, to learn more about your 401(k) and account features.