Verify 401(k) Contribution Pay Dates at Year-end

Before submitting 401(k) Pension Plan contributions from your cooperative’s year-end 2017 and early 2018 payrolls, remember to compare the pay date shown in NRECA’s system to the one in your payroll system (usually the paycheck date). If they don’t match, adjust the pay date in NRECA’s system to match the pay date in your payroll system, keeping in mind that that your pay date and payroll end date may be different.

Here are two examples:

1. If your paychecks were dated December 29, 2017, then the pay date in NRECA’s system should reflect December 29, 2017.
2. Contributions from paychecks dated on or after January 1, 2018 are for 2018. So, for example, if your pay period end date was December 29, 2017 but the paychecks are dated January 5, 2018, check the pay date shown in NRECA’s system. If the system has a different date, change the pay date to January 5, 2018 before submitting the contributions.

Remember 2017 deferral limits
As your co-op makes final contributions for 2017, pay attention to IRS deferral limits for individual 401(k) Plan participants. In particular, deferrals from the final paycheck of an employee who terminates in 2017 count toward the 2017 limit, even if the employee’s final paycheck is dated in 2018.

For example, an employee terminates on December 29, 2017 and receives her final paycheck on January 5, 2018. You would send her final 401(k) Plan deferral along with the rest of the co-op’s January 5, 2018 contributions. However, the amount the employee defers from the final paycheck counts towards (and can’t exceed) the 2017 limit.

For questions about 401(k) Plan deferral limits or planning deferrals for your terminating employees, call the benefits compliance team at 866.673.2299, option 7 or email us at compliance@nreca.coop.