Employee Contributions
You are allowed to defer a portion of compensation to the plan. These amounts are referred to as deferrals and are held in an account for you. You may elect to defer a percentage of your compensation each year instead of receiving that amount in cash. The amount you elect to defer, and any earnings on that amount, will not be subject to income tax until it is actually distributed to you.
Employer Contributions
C4PS will make a safe harbor matching contribution equal to 100% of your deferrals up to 5%. This safe harbor contribution is 100% vested.
Example:
Salary: $30,000 annually. Employee defers 5% of salary per pay for the entire year to 401k for a total of: $1,500.
Employer matches (100%) of 5% for each pay period of deferred salary = $1500.
Total 401k deferral and contribution annually (employee and employer match) is: $3,000 (interest excluded).