401(k) True-Up Contributions for Tax-exempt Co-ops Due May 15

If your cooperative is tax-exempt, May 15 (your tax filing deadline, unless you file an extension) is the due date for 401(k) Pension Plan true-up contributions.

By now you should have reviewed each participant’s 2016 401(k) employer contribution. For participants who did not receive their full amount for either base or match, send a true-up contribution by May 15. This final compliance task ensures that your employees get the correct employer contribution amount (as described in your adoption agreement), and supports accurate nondiscrimination testing. Note that the true-up deadline for taxable co-ops was March 15 (unless you filed an extension). If you missed the March 15 deadline but still need to send true-up contributions, please send them right away and notify the benefits compliance team that you’ve sent them.

As you review participants’ employer contribution calculations, pay special attention to anyone who terminated employment, took a hardship distribution, moved on or off of disability or changed their deferral rates during 2016. Also, be sure to review amounts for employees who terminated during 2016, as individuals who are no longer on your payroll could be overlooked.

For examples of how to calculate employer contributions and send true-up contributions to NRECA, see the resource article on the Employee Benefits website.

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