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Plan Ahead, Inc. established a defined contribution 401(k) plan for its employees effective January 1, 2022. Pretend it is the beginning of the following year
Plan Ahead, Inc. established a defined contribution 401(k) plan for its employees effective January 1, 2022. Pretend it is the beginning of the following year (2023), and you are looking backwards into 2022. Contributions to the plan consist of employee 401(k) deferrals, an employer discretionary matching contribution and a discretionary profit-sharing contribution. Employees age 22 or older are immediately eligible to participate in 401(k). However, to be eligible to participate in the matching portion of the retirement plan, an employee must be age 22 and have been employed for a minimum of 1 year. An employee automatically enters the 401(k) plan on the January 1 or July 1 after or coinciding with meeting the eligibility requirements. Being separated from the firm does not impact an employee's eligibility for matching. For the year ended December 31,2022 , Plan Ahead decided to match employee deferrals 50% up to a 7% deferral
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