Frequently Asked Questions
According to the IRS employees fall into one of two categories, Highly Compensated (HCE) and Non-Highly Compensated. For 2012, the IRS defines a Highly Compensated Employee as any employee with wages earned over $110,000 in 2011. Everyone else is defined as Non-Highly Compensated. Non-Highly Compensated employees may contribute up to $17,000. Participants aged 50 or older by yearend 2012 may contribute an additional $5,500 for a total of $22,500. HCE’s, age 50 and over by year-end 2012, may contribute the additional $5,500 catch-up contribution regardless of other ADP limits below.
Highly Compensation Employee’s contributions are subject to testing in accordance with IRS regulations. Currently we advise that employers limit contributions by Highly Compensated Employees to 7% of wages.
The Elevator Constructors Annuity and 401(k) Retirement Plan is a 401(k) plan for members outside of Local One of International Union of Elevator Constructors that currently participate in the NEI Benefit Plans. Employee participation is voluntary.
Nothing. All contributions are deducted on a pre-tax basis from the employee’s pay. All plan expenses are paid by the plan at no charge to the employer.
What are the recordkeeping requirements of the Elevator Constructor Annuity and 401(k) Retirement Plan?
Like any payroll or personnel matter the Plan requires that the employer perform certain recordkeeping functions. The employer must track the voluntary contribution rates and calculate an appropriate deduction each week. On a monthly basis the employer must report the contribution information to the NEI Benefits Office and make the required contribution remittance.
On a weekly basis, each employer must report the deferral amounts (employee contribution) to the Benefits Office on the Deferral Report Form provided by the Benefits Office. An electronic format approved by the Benefits Office on tape or diskette may also be used. Reports must be filed every week. The Deferral Report Form must be filed even in weeks when no deferral contributions are due. The earnings/W2 wages are reported on the Hours Report Form in order to track wage information for non-discrimination testing.
Contributions are due no later than seven (7) calendar days after the employee receives his or her paycheck. Because these contributions represent employee withholdings, the Internal Revenue Service requires that contributions be made as soon as they can be segregated from employer assets. Late contributions or failure to make required contributions can result in severe penalties.
No. Since deferral contributions to the Plan represent employee contributions they must be kept separate at all times.
Can an employer maintain its own 401(k) plan and participate in the Elevator Constructor Annuity 401(k) Retirement Plan?
Yes but it is very complicated. Participating in two 401(k) plans should only be done after consultations with attorneys for both plans.
Effective 1/1/03 employers are automatically eligible to participate without having to complete or sign any election form or Participation Agreement. Weekly employee deferral reporting and payment will be separate from reporting and payment of fringe benefit contributions to the benefit plans. The employer must contact the Benefits Office @ 800-523-4702 extension 2312 or 2302 to advise of their participation in the voluntary employee deferrals and request the weekly Deferral Report Form.
The employer will receive information from MassMutual Financial Group and the Benefits Office. MassMutual Financial Group’s enrollment kit includes sample forms, contact information and other participant and investment information. From then on, the Benefits Office will send weekly Deferral Report Forms separate from the monthly Hours Report Forms.
The employee must contact MassMutual Financial Group @ 800-743-5274, identify the plan, #60041 and request an enrollment kit. The kit contains general information, prospectuses, enrollment/deferral change, investment election and beneficiary forms. The employee should forward the 401(k) Contribution Enrollment/Deferral Change form to their employer for recording and payroll setup, the investment election form to MassMutual Financial Group and the beneficiary form to the Benefits Office.