What is a 401k?
A 401k is a qualified retirement plan that allows eligible employees of a company to save and invest for their own retirement. There are two types: Traditional 401k and Roth 401k – the main differences relate to how they are taxed.
Contributions made to Traditional 401k are made pre-tax, typically through automatic payroll withholding and employers can match some or all of the contributions. Taxes are paid when employees withdraw money. In a Roth 401k, contributions are made post-tax therefore withdrawals are tax free.
Contributions to either form of 401k are limited in each annual period – please refer to IRS guidance.
What are the current 401K integrations in Rippling?
Admins and employees can visit the App Shop to review 401K integrations.
There are different levels of integration (i.e. 180 or 360) which will be made known upon setting up a 401k app in Rippling. In 180 Integrations: 401k deductions in each pay run are synced to the 401k provider (401k rates must be entered manually into the deduction settings). In 360 Integrations: 401k deductions in each pay run are synced to the 401k provider AND 401k rates are synced to Rippling.
Whether there is a 401k integration or not will determine where an Admin must set up the logic for employer matching. In either case this is set offered as a dollar match (50 cents or $1 for every dollar the employee contributes) or percent match (.25% of employee contributions).
How to set up safe harbor 401k match:
This article walks through the process.
Rippling will automatically apply annual limits for employee contributions.