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

Yes, you can offer a 401(k) plan to your employees in Texas. Here are the requirements:

Requirements for offering a 401(k) plan in Texas

  • According to Tex. Gov’t. Section 609.118, a political subdivision or group of political subdivisions that creates a 401(k) plan may establish a trust to hold deferred amounts and investment income for the benefit of participating employees and act as trustee of the trust.
  • The plan administrator of a 401(k) plan shall develop and implement procedures to efficiently administer a program that allows a qualified vendor to lend money to a participating employee, as per Tex. Gov’t. Section 609.117 [1.2]([1.2]).
  • A plan administrator of a 401(k) plan may delegate the administrator’s authority and responsibilities under this subchapter to another person, as per Tex. Gov’t. Section 609.105 [1.3]([1.3]).

Therefore, to offer a 401(k) plan to your employees in Texas, you must establish a trust to hold deferred amounts and investment income for the benefit of participating employees and act as trustee of the trust. Additionally, you must develop and implement procedures to efficiently administer a program that allows a qualified vendor to lend money to a participating employee, and you may delegate the administrator’s authority and responsibilities under this subchapter to another person.

I hope this helps! Let me know if you have any further questions.

Source(s):
Jurisdiction

Texas