Plan Document Requirements

Your 401(k) plan or policy document must include:

1. The formula for calculating employer-matching contributions. For example, “50% of salary deferrals up to 6% of the employee’s eligible compensation — for a 3% maximum match.”
2. 401(k) vesting schedule. Vesting is the process by which your employer’s contributions legally become yours. The time it takes for this process to occur varies greatly by employer.
3. 401(k) participation requirement. This is an eligibility rule for participating in a 401(k). It’s based on the number of hours you’ve worked or the time elapsed since you were hired.
4. Specifics about taking 401(k) loans, withdrawals, and their repercussions. Please ensure it includes specifics about in-service withdrawals, rollovers, and penalties regarding loans and withdrawals. 3

Your ESPP summary must include:

1. Discount rate. This is the rate at which employers allow eligible employees to purchase company stock at a discounted price.
2. Enrollment period dates. This refers to a designated timeframe during which eligible employees can enroll in the ESPP and indicate their participation in the plan.
3. Offering period dates. This refers to a defined period of time during which employees can contribute a portion of their eligible compensation toward purchasing company stock. Contributions are made through payroll deductions.
4. Purchase Dates. These are the specific dates when employees are permitted to purchase company stock using their accumulated contributions.
5. Participation Requirement. This refers to the amount of time an employee must work before becoming eligible to participate in their ESPP.
6. Holding or Lock-up requirements (if applicable). These requirements force participants to hold the purchased shares for a certain period of time before they can be sold. This does not apply to all ESPPs.
7. Lookback provision. This provision is used to determine the purchase price relative to the Fair Market Value. More specifically, a lookback provision bases the purchase price not on the stock price at the time of purchase but, rather, on the price at a time determined by your employer.
   
   If your paystubs happen to be multiple pages, you can click here for a helpful guide on how to combine all the pages into a single PDF document to upload.