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Can I offer a 401(k) plan to my employees in Minnesota? What are the requirements?

Requirements for Offering a 401(k) Plan in Minnesota

Yes, you can offer a 401(k) plan to your employees in Minnesota. However, there are certain requirements that you need to fulfill.

  • Employer Eligibility: Any employer, regardless of size, can offer a 401(k) plan to its employees [2].
  • Employee Eligibility: Any employee who is at least 21 years old and has completed one year of service is eligible to participate in the plan [2].
  • Automatic Enrollment: Employers can have an automatic enrollment feature in their 401(k) plan, which permits them to automatically reduce an employee’s wages by a fixed percentage or amount and contribute that amount to the 401(k) plan unless the employee has affirmatively chosen not to have their wages reduced or have chosen to have their wages reduced by a different percentage [2].
  • Contribution Limits: The contribution limit for 401(k) plans in 2021 is $19,500 for employees under 50 years old and $26,000 for employees 50 years old and over [2].
  • Reporting and Disclosure Requirements: Employers must provide certain information to employees, such as the plan’s summary plan description, annual reports, and other disclosures [2].

Transmitting Retirement Plan Contributions to the Program

Employers that do not sponsor a retirement plan for their employees are required to transmit a percentage of each employee’s pay to the Program [3]. However, it is not clear from the context whether this requirement applies to employers who offer a 401(k) plan to their employees.

Conclusion

In summary, you can offer a 401(k) plan to your employees in Minnesota as long as you fulfill the eligibility requirements and comply with the reporting and disclosure requirements. It is not clear from the context whether you need to transmit retirement plan contributions to the Program if you offer a 401(k) plan to your employees.

Source(s):
Jurisdiction

Minnesota