Pay on that bonus

Bonuses are something I don’t know much about since the only bonus I got was $300 three months after I started as an ERISA attorney. What I do know about bonuses is my role as an ERISA attorney and I have to say from experience that it is necessary to be included in the definition of compensation because otherwise, it invites error.

A small cottage industry of my practice is submitting plans to the Internal Revenue Service as part of the voluntary compliance program and a huge part of that, deals with plans excluding bonuses from the definition of compensation for the purposes of salary deferrals and employer contributions, even though the plan document says otherwise or vice versa where the include it, but the plan definition excludes it.

I come from the belief that you should “keep it simple, stupid.” That is why I think you should just offer deferrals and employer contributions on bonuses, just my two cents.

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