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401(k) Answer Book, 2020 Edition by Empower Retirement 401(k) Answer Book, 2020 Edition by Empower Retirement

401(k) Answer Book, 2021 Edition

By Empower Retirement
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Quite simply, the hunt for specific answers to important questions begins - and ends - with this clear, comprehensive resource.

401(k) Answer Book covers all aspects of plan design and administration, as well as the relationships of 401(k) plans with other types of retirement plans. When participants, sponsors, or service providers ask you questions, this book gives you the answers.

401(k) Answer Book provides coverage of 401(k) plan design, testing, taxation, reporting and disclosure, and termination, and brings you up to date on investment-related topics and regulatory guidance.

Written by the experts at Empower Retirement, this comprehensive one-volume desk reference is a must have for pension administrators, benefits managers, fund managers, trustees, accountants, attorneys, human resource professionals, consultants, advisors, and anyone who deals professionally with 401(k) plans.

401(k) Answer Book, 2021 Edition is packed with special features, including:

  • A 401(k) Compliance Calendar
  • An IRS Rollover Chart
  • A chart of key participant disclosures and notices with cross-references to chapters for detailed information
  • Up-to-date sample notice templates for safe harbor 401(k) plan notices, automatic enrollment notices, and QDIA notices (appendices A, B, and C)
  • Sample Section 404(c) checklist
  • Information on rollover rights of nonspouse beneficiaries
  • Model notice for an EIAA
  • Practical information on partial plan terminations, plan mergers, and spinoffs
  • Fiduciary guidelines for selecting an annuity payment option
  • And much more!

Note: Online subscriptions are for three-month periods.

Previous Edition: 401(k) Answer Book, 2020 Edition, ISBN 9781543817324

Pages 1430
Publish Date 05/03/2021
Publish Frequency Annually
Product Line Wolters Kluwer Legal & Regulatory U.S.
ISBN 9781543823677
SKU 10083055-7777
Publish Frequency Annually
Product Line Wolters Kluwer Legal & Regulatory U.S.
SKU 000000000010073209
Table of Contents

1. Introduction to 401(k) Plans

  • History of 401(k) Plans
  • Advantages and Disadvantages of 401(k) Plans
  • Taxes and 401(k) Plans
  • Analyzing the Roth 401(k) Option
  • Types of Entities That May Use 401(k) Plans
  • When a 401(k) Plan Is Appropriate
  • Multiemployer and Multiple-Employer 401(k) Plans
  • Multiple-Employer Plans
  • Market for and Utilization of 401(k) Plans
  • Future of 401(k) Plans
  • Legislative and Regulatory Developments Affecting 401(k) Plans
  • Proposed Legislative and Regulatory Developments

2. 401(k) Plan Design

  • Design Options and Objectives
  • Types of 401(k) Plan Contributions and Automatic Contribution Arrangements
  • Qualified Automatic Contribution Arrangements
  • Basic Qualification Requirements
  • SIMPLE 401(k) Plans
  • Safe Harbor 401(k) Plans
  • Eligible Combined Plans

3. The 401(k) Plan Document

  • Plan Document Alternatives
  • Advance IRS Approval

4. Plan Services and Service Providers

  • 401(k) Plan Services
  • Selecting Plan Administration Services
  • Selecting Investment Services
  • Allocation of Earnings and Expenses
  • Payment of Fees and Expenses
  • Legal and Regulatory Initiatives Concerning 401(k) Plan Fees
  • DOL Final Rule on Service Provider Fee Disclosure
  • Other Activity on Fee Disclosure

5. Fiduciary and Prohibited Transaction Rules

  • Fiduciary Issues
  • Prohibited Transactions
  • Managing Fiduciary Liability in a 401(k) Plan
  • Managing Personal Liability
  • The Voluntary Fiduciary Correction Program
  • Fiduciary Concerns Related to Specific Investment Products
  • Economically Targeted Investing

6. Investing Plan Assets

  • Primary Asset Classes
  • Investment Vehicles
  • Asset Allocation Strategy
  • Managed Account Service
  • Employer Securities
  • Directed Trustee Considerations
  • 401(k) Stock Ownership Plans
  • Self-Directed Brokerage Options
  • Investment Policies
  • Selecting and Monitoring Plan Investments
  • Proxy Voting and Shareholder Engagement
  • Mutual Fund Investigations
  • Investment Fees and Revenue Sharing

7. Participant Direction of Investments - ERISA Section 404(c)

  • Participant-Directed Plans
  • Broad Range of Investment Alternatives
  • Independent Exercise of Control
  • Disclosure Requirements
  • Investment Change Frequency
  • Investment Elections
  • Fiduciary Liability Relief
  • Qualified Default Investment Arrangements
  • Blackouts and Changes in Investment Options
  • Litigation Involving Participant-Directed Plans

8. Participant Communication and Education

  • An Effective 401(k) Communication Program
  • Department of Labor Guidance on Participant Investment Education
  • Individual Retirement Planning

9. Contribution Limits

  • Limits on Elective Deferrals
  • Code Section 415 - Annual Addition Limits
  • Code Section 404 - Deduction Limits

10. Data for Nondiscrimination Testing

  • Who Is the Employer?
  • What Is a Plan?
  • Who Is an Employee?
  • Who Is a Highly Compensated Employee?
  • What Is Compensation?

11. Minimum Coverage Testing

  • Minimum Participation
  • Minimum Coverage
  • Correcting Minimum Coverage Failure

12. General Nondiscrimination Testing

  • Testing of Employer Nonelective Contributions
  • Permitted Disparity
  • Nondiscriminatory Availability of Benefits, Rights, and Features

13. ADP and ACP Testing

  • Avoiding ADP and ACP Testing
  • The Actual Deferral Percentage Test
  • The Actual Contribution Percentage Test

14. Top-Heavy Rules

  • Top-Heavy Testing
  • Minimum Vesting
  • Minimum Contributions
  • Top-Heavy Strategy

15. Participant Loans, Hardship Withdrawals, and In-Service Distributions

  • Participant Loans
  • Hardship Withdrawals
  • In-Service Distributions
  • Relief for Specific Disasters

16. Distributions Subsequent to Termination of Employment

  • Optional Forms of Benefit
  • Minimum Distribution Requirements
  • Participants Called to Active Military Duty
  • Rollover Rules
  • Withholding on Distributions
  • Claims for Benefits

17. Spousal Rights

  • Survivor Annuity Requirements
  • Annuity and Other Lifetime Income Products
  • Qualified Domestic Relations Orders

18. Taxation of 401(k) Plans

  • Payroll Taxes
  • Taxation and Reporting of Distributions and Pre-Tax Contributions
  • Life Insurance
  • Loans
  • Distribution of Excess Deferrals
  • Distributions of Excess Contributions and Excess Aggregate Contributions
  • Taxation of Roth Distributions and In-Plan Roth Rollovers
  • Other Taxes
  • Filing Requirements for Distributions
  • Distribution Planning

19. Reporting and Disclosure

  • IRS and DOL Form 5500 Reporting
  • EFAST2
  • Special Filing Issues
  • Participant Disclosures
  • Use of Electronic Technology
  • Record Retention Under ERISA

20. Correcting 401(k) Plan Qualification Errors

  • Employee Plans Compliance Resolution System
  • Self-Correction Program
  • Voluntary Correction Program
  • Audit Closing Agreement Program

21. Plan Terminations, Mergers, Spin-Offs, and Abandoned Plans

  • Plan Terminations
  • Missing Participants
  • Partial Termination
  • Mergers and Spin-Offs
  • Plan Considerations During Major Business Transactions
  • Abandoned Plans

22. 401(k) Plan Alternatives

  • Individual Retirement Arrangements (IRAs)
  • Simplified Employee Pensions (SEPs) and Salary Reduction SEPs (SARSEPs)
  • SIMPLE IRAs and SIMPLE 401(k) Plans
  • Cash Balance Plans
  • Floor Offset Plans
  • Nonqualified Deferred Compensation (NQDC) Plans
  • Section 403(b) Plans - Tax-Sheltered Annuities
  • Section 457(b) Eligible Deferred Compensation Plans
  • State Savings Programs for Non-Government Employees


  • Sample Safe Harbor 401(k) Plan Notice
  • Automatic Contribution Arrangement Comparison Chart and Sample Notices
  • Automatic Contribution Arrangement Comparison Chart
  • Sample Notice for Plans with an Automatic Contribution Arrangement (ACA)
  • Sample Notice for Plans with an Eligible Automatic Contribution Arrangement (EACA)
  • Sample Notice for Plans with a Qualified Automatic Contribution Arrangement (QACA)
  • Sample Notice for Safe Harbor QACA Plans with an Eligible Automatic Contribution Arrangement (EACA)
  • Sample Plan Sponsor Fiduciary Manual
  • Sample Plan Sponsor Fiduciary Checklist
  • Sample ERISA Section 404(c) Compliance Checklist
  • Sample Qualified Default Investment Alternative (QDIA) Notice
  • Sample ERISA Section 404(a) Participant Disclosure Checklist
  • Key Indexed Limits (2017–2018)
  • Key Indexed Limits Affected by the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA)
  • DOL Model Blackout Notice
  • IRS Model Diversification Notice for Plans Holding Publicly Traded Employer Securities
  • Model Participant Disclosure Regarding Eligible Investment Advice Arrangements (EIAAs)
  • IRS Rollover Chart
  • 401(k) Plan Compliance Calendar
  • DOL Model Comparative Chart
  • Sample DOL Guide to 408(b)(2) Initial Disclosures
  • Fixing Common Plan Mistakes—Correcting Missed Deferrals
  • DOL 2016 Fiduciary Rule
  • Best Interest Contract Exemption (BICE)


  • Internal Revenue Code Sections
  • United States Code
  • Pension Protection Act of 2006
  • Cases
  • Code of Federal Regulations
  • Treasury Regulations
  • Department of Labor Regulations, Opinions, and Field Bulletins
  • Miscellaneous IRS Announcements, Notices, Memoranda, Rulings, and Procedures