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IRS catches up on 401(k) rules; Employers get new guidance in how tax law changes affect retirement plans.(Brief Article)
Business Insurance, October, 2001 by Geisel, Jerry
WASHINGTON-Employers now have the official guidance on implementing a tax law provision that will allow older employees to make ``catch-up'' contributions to their 401(k) plans. That provision in the tax law enacted earlier this year allows employees age 50 and older to add an extra $1,000 to 401(k) and certain other types of defined contribution plans beginning in 2002.
The maximum allowable catch-up contribution will increase annually in $1,000 increments until it reaches $5,000 in 2006. ``Employees will embrace this. Ultimately, just about every 401(k) plan in the country will have a catch-up feature,'' predicts Tom Butterworth, a consultant with Hewitt Associates L.L.C. in New York. Until now, lack of guidance from the Internal Revenue Service on...
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