How will gain sharing affect my 401(k) plan?
Gain sharing may affect your 401(k) plan. Your 401(k) plan is subject to two separate limits – one limiting elective deferrals (elective deferral limit) and one limiting total contributions, including both elective deferrals and employer contributions (annual additions limit). Gain sharing will not affect the elective deferral limit but it is included in determining whether you have exceeded your annual additions limit. Whether gain sharing will affect your annual additions limit will depend on the level of your compensation, the amount of elective deferrals and employer contributions to your 401(k) account, and the level of gain sharing each year.
