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    414(h) Retirement Pick-Up Plans

    Keeping 414(h) Pick-Up Plans Compliant

    Section 414(h) of the Internal Revenue Code enables governmental employers to "pick up" certain employee contributions to retirement plans and thereby make them pre-tax contributions (and, in some cases, a payment by the employer). Despite considerable IRS guidance on pick-up contributions, employers often fall into noncompliance.

    We have advised numerous public agencies on avoiding the problem areas of these complex rules.

    We can help you stay compliant by determining:

    • Whether "pre-tax" employee contributions were properly picked up.
    • Whether plan designs that use or rely on pick-ups comply with current IRS guidance.
    • Whether certain provisions involving pick-ups may create tax problems.
    • If special timing rules apply to employee contributions that will be picked up.