Consider Pay Dates and 2013 Deferral Limits when Sending 401(k) Contributions in Early 2014

Contact us if you need help with these issues.

When you send 401(k) Pension Plan contributions from payrolls in early 2014 and late 2013, pay close attention to the pay dates you use. The pay date you use to submit contributions must be the date the money was available to your employees. It may be different from the payroll end date.

For example, if the paycheck was in your employees’ hands (or their accounts, if you use direct deposit) on or before December 31, 2013, then the pay date for those contributions will be in 2013. If the paychecks or direct deposits were available to employees on or after January 1, 2014, the contributions are for 2014. So, for example, if your payroll end date was December 31, 2013 and the money was available in the employees’ accounts on January 2, 2014, the pay date for those contributions is 2014.

For more information about how to send your 401(k) contributions, visit the Employee Benefits website. Go to Administration > BA Assistant > Learn About Benefit Plans > 401(k) Pension Plan > 401k checklists > how-to-send-401(k)-contributions. Step 1 covers choosing the dates for your contributions.

For questions about how to send 401(k) contributions or about your payroll dates, contact the Member Contact Center at 1.866.673.2299 or contactcenter@nreca.coop.

Consider 2013 deferral limits
As your cooperative makes final contributions for 2013, remember the IRS deferral limits.

This is especially important for terminating employees because deferrals from their final paycheck count toward the limit for the year of termination. This is true even if the employee receives the final paycheck in the following year.

For example, an employee terminates on December 31, 2013, and receives her final paycheck on January 3, 2014. You would send her 401(k) deferral along with the rest of the co-op’s January 3, 2014 contributions. The amount the employee defers from the final paycheck is added to what she already deferred in 2013, and it can’t exceed the 2013 IRS deferral limit. Remember this when you plan the final 401(k) deferrals for terminating employees.

For questions about 401(k) deferral limits or planning deferrals for your terminating employees, call the benefits compliance team at 1.866.673.2299, option 7.