401(k) Plan True-up Contributions for Taxable Co-ops Due March 15

The tax return deadline for taxable cooperatives is March 15, 2017. If your co-op falls into this category, remember to review your employees’ 2016 401(k) Pension Plan employer contributions and send all needed true-up contributions before March 15. For non-taxable co-ops, the deadline is May 15, 2017.

Making timely true-up contributions into your employees’ accounts helps ensure that your co-op’s nondiscrimination tests are accurate. And giving each employee his or her correct and full employer contribution keeps your plan in compliance with the elections in your adoption agreement.

Calculating employer contribution amounts
Employer contributions are usually easy to calculate, but the process can become complex for employees who terminated employment, took a hardship distribution, came on or off of disability, or changed their deferral rates during the year. As you review each employee’s match and base totals for 2016, pay special attention to employees who fall into these categories, particularly those who terminated during 2016. Don’t forget to include these employees in your review.

For helpful examples of how to calculate employer matching contributions and information about how to send true-up contributions to NRECA, see the detailed instruction sheet on the Employee Benefits website.

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