As a 401(k) plan sponsor, you need to operate according to its terms. The concept is silly, but the fact is that most plan sponsors never read the plan document. You might think you’re excluding or including union employees, and it might turn out wrong.
A plan document excluding employees you included is one problem, but including employees in the plan document and you excluded in administration, is a costlier headache in potential corrective employer contributions.
I’ve seen too many of these plan document issues of late, so make sure the plan document is consistent in your administration of which employees you cover, and who you exclude.
