401(k) Plan True-up Contributions for Taxable Co-ops Due March 16

The tax return deadline for taxable cooperatives is fast approaching—March 16.  If your co-op falls under this category, remember to review your employees’ 2014 401(k) Pension Plan employer matching contributions and send all needed true-up contributions before this date. If you plan to file an extension, do it as soon as possible.  (The deadline for non-taxable co-ops is May 15.)

Depositing timely true-up contributions into employees’ accounts helps ensure the accuracy of your co-op’s nondiscrimination tests. And making sure each employee gets his or her correct and full employer match keeps your plan in compliance with the matching formula in your adoption agreement.

Calculating match amounts
Usually matching contributions are easy to calculate. But they can be more complex for employees who terminated employment, took a hardship distribution, came on or off of disability or changed their deferral rates during the year. Pay special attention to employees who terminated during 2014, and don’t forget to include them in your review process.

For helpful examples of how to calculate employer matching contributions and information about how to send true-up contributions to NRECA, see the article on page 14 of the Winter 2015 Benefits Bulletin.

If you have any questions about calculating the employer match or true-up contributions, contact the benefits compliance team at 866.673.2299, option 7, or at pension.compliance@nreca.coop.