401(k) Plan

A 401(k) Plan policy explains who's eligible to participate, how employees can enroll and change contributions, what employer contributions and vesting apply, and where to find the plan's official terms in the Summary Plan Description (SPD) and related plan documents.

How to Write a 401(k) Plan Policy

• Start with "why" and introduce the concept.
• State that your organization offers a 401(k) plan and describe the main contribution options (traditional and Roth).
• Explain where employees can find the plan documents that govern the benefit and summarize what those documents cover.
• Define who is eligible to participate.
• Describe the employer match, using a simple summary of the match formula.
• Explain vesting at a high level, separating employee contributions from employer contributions.
• Describe how employees can enroll and update their contribution elections.
• Note that contribution limits apply under tax rules.
• Close with where to go for questions and the primary plan reference document.

For advice on writing a 401(k) Plan policy in a specific jurisdiction, see below.