Attention 401(k) plan managers! Consider scheduling some time with your payroll department in the early part of the year to review your 401k plan’s definition of compensation together with counsel, especially if your plan was recently restated for changes in law.

Then, report same to the 401k plan committee so they know the plan is being administered properly (and reflect that in the minutes).

Let’s make sure the plan document reflects what is happening in operation (and vice versa).

401(k) plan Fix-it Guide – You didn’t use the plan definition of compensation correctly for all deferrals and allocations | Internal Revenue Service