As a Plan Administrator, you’re responsible for making sure employee compensation, rollovers, and hours are tracked correctly. This ensures compliance with IRS and Department of Labor (DOL) regulations and helps your employees get the full benefit of the plan.

Who This Applies To

This information is for Plan Administrators/Employers who manage their company’s 401(k) plan through Ubiquity.

Bonuses and Commissions in Plan Compensation

Are bonuses and commissions included in plan compensation?

  • Yes, if Ubiquity is your plan document provider, bonuses and commissions are included in the definition of compensation.
  • Excluding them would require additional nondiscrimination testing and add complexity to your plan’s administration.

If your plan document is managed by a third-party administrator (TPA), contact them directly to confirm how compensation is defined.

How do employee deferrals apply to bonuses and commissions?

You, as the employer, have discretion over whether employee deferral elections automatically apply to bonuses and commissions. This is not controlled by your plan document or Ubiquity’s system.

You can choose to:

  1. Automatically apply deferrals to all compensation, including bonuses and commissions (recommended for ease and compliance).
  2. Require a separate election for bonuses/commissions.
  • If you choose this option, you must provide a way for employees to make elections (e.g., a paper form or email confirmation).
  • You are responsible for tracking and applying these elections consistently. Ubiquity does not track this information.

Best Practice: To reduce risk of error, apply deferral elections automatically to all compensation types.

Uploading Hours and Compensation for All Employees

Why is this required?

You must upload hours and compensation for all employees, even if they are not participating in the plan. This ensures:

  • Eligibility Tracking
    • For plans requiring 1,000 hours of service for eligibility.
    • For SECURE Act 2.0 compliance (tracking part-time employees working 500–999 hours for two consecutive years).
  • Annual Compliance Testing
    • All eligible employees must be included to ensure nondiscrimination compliance.
    • Accurate compensation data speeds up census verification, ensures correct employee classifications and helps avoid retests. 
  • Vesting
    • If your plan has a vesting schedule, hours are needed to ensure participants receive proper vesting credit.
  • Employer Contributions
    • Non-participating employees may still be eligible for contributions (e.g., safe harbor, top-heavy, or discretionary contributions).

How to add or update hours/compensation:

  1. Log in to your Employer Dashboard 
  2. Click Employees in the left navigation menu.
  3. Select the employee’s name.
  4. In the pop-up menu, click Manage Hours and Compensation.
  5. Choose the year (Current or Previous) and click Edit.
  6. Update the necessary fields and click Save Hours & Comp.

Employee Rollovers Before Eligibility

Can employees roll over funds before meeting eligibility?

Yes. Employees may roll over money from another eligible retirement account (such as a 401(k) or IRA) into your company’s plan even if they are not yet eligible to contribute.

How the rollover process works for employees that have not met eligibility:

  1. Request the Rollover Form
    • The employee requests an Incoming Rollover Form by:
    • Using the chat function on our website, or
    • Emailing info@myubiquity.com
  2. Submit Rollover Funds
    • Once received, the funds are deposited into the plan’s trust account under the employee’s name.
    • Until the employee meets eligibility and registers, funds are automatically invested in your plan’s Qualified Default Investment Alternative (QDIA), typically a target-date fund.
  3. Accessing Funds if Needed
    • If the employee needs a distribution before meeting eligibility, they can request a paper Distribution Form through chat or by emailing info@myubiquity.com.

Key Takeaways:

  • Employees do not need to be plan-eligible to roll funds in.
  • Rollovers do not grant early access to contributions or investment customization until eligibility requirements are met.

Need Help?

If you need help managing employee information, please contact us.