Rigid administrative requirements make many employers hesitate to participate in so-called 401(k) safe-harbor plans. But these programs can prove valuable because they permit you to avoid costly discrimination testing requirements by following a specific formula for contributions. Now the IRS has issued new rules that add some flexibility. Significant changes include revising the way matching and elective contributions are calculated and simplifying the information that has to be included in the annual notice to eligible employees. Stockbrokers and other investment firms, however, may not yet be geared up to offer plans that incorporate these changes.
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