Just a query as to how a company with a 401K plan can manipulate the plan so that an hourly employee's contributions are limited to a 40 hour work week and overtime earnings are not considered or calculated into their contributions? This doesn't seem to be a fair practice to me. Anybody know of the regulations governing this?

Can you please explain this in more detail as what you are asking.


401K is a retirement plan that allows employees to put a percentage of their earnings into the plan for retirement. Many firms, but not nearly all of them often offer and pay a matching sum of money for every dollar paid by the employee. This can be done in 100's of combinations, my current company matches up to 6 percent of my earnings, if I deposit that much, but they only pay an amount equal to what I put in.

A company I talke to last week, would pay a percentage even if I did not put anything in.

If you are discussing a plan like this, where your company gives you money you have not earned but is giving you money into your retirement plan bases on a percentage of your pay. Most benefits companies merely use base pay to calculate these deposits and other benefits. This also includes often life insurance which if based on a percent of your income is most often only based on your base pay not your total pay.

So you will need to describe which type of system you are under and what limit you are discussing.

but in general a company may pay into these plans using all sorts of varoius plans and combinations

It would be best to contact your plan administrater for the specifics but most of the plans I'm familiar with take a percentage of your pre-tax gross and deposit this into an account,any matching funds are calculated on this deposit amount or whatever your balance is at preset times of the year.I've never heard of a plan such as yours before nor can I see why a company would even do it so differently. More details or an example would help!:cool: