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What are the rules for setting up a 401(k) plan?
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The rules for setting up a 401(k) plan depend on the type of plan selected, as well as the financial resources available. Generally, employers must select a plan design, identify a plan administrator or custodian, adopt a plan document and summary plan description, perform eligibility requirements, establish contribution guidelines, and determine if vesting is immediate or deferred. Additionally, employers must comply with IRS rules and report any contributions made to the plan.