HCE
A client of ours ( age 55 ) is a Highly Compensated Executive ( $ 260,000.00 ) was recently told that she can not contribute to their Roth 401(k) Plan. All of her contributions had to be Pre-Tax.
Why do I think this is not accurate? Any thoughts?
Permalink Submitted by Alan - IRA critic on Mon, 2024-08-12 13:10
Yes, inaccurate. Compensation for HCE purposes includes all elective deferrals whether pre tax or Roth, so if the employer plans to limit contributions, the limit should be applied regardless of contribution type.