The Department of Labor (DOL) considers these to be single plans for purposes of Form 5500. The IRS considers these individual plans for purposes of nondiscrimination testing and top-heavy testing. MEPs are a single retirement plan that multiple companies participate in. A new comparability plan can be set up just for employer profit sharing contributions, but are typically established with a 401(k) safe harbor feature.įind Your Retirement Plan Consultant Multiple Employer Plans (MEPs) This testing allows larger contributions to be made to older employees, including owners, because they are closer to retirement age. This type of plan takes advantage of IRS nondiscrimination testing that converts employer contributions to monthly lifetime benefits at age 65. Option of offering different types of distributionsĪ new comparability plan is a special profit-sharing plan designed to maximize the overall retirement plan contributions for business owners and targeted highly compensated employees.Ability to add a vesting schedule to company contributions.Wide variety of plan provisions, including eligibility and rollover options.Traditional 401(k) plans are great for companies who want to offer their employees the chance to save for their own retirement! They are especially appealing to employers who have a lot of participation from all classes of employees and who like the idea of deciding each year whether or not to make company contributions to the plan. Nova also prepares the annual Form 5500 filing and any IRS-required amendments to the plan document. Additionally, our Smooth Start plan eliminates the initial plan document fee to establish the plan, thereby making it easy for an employer to start the 401(k) plan. Our Smooth Start plan provides a Safe Harbor plan design setup, as well as employer-determined eligibility features such as loans and pre-tax rollovers into the plan. This creates an affordable, easy option for employers sponsoring their first 401(k) plan – there is no need for complicated features or confusing plan design choices. Ability to include an additional employer profit sharing contributionĪ “Smooth Start” 401(k) Plan is a unique Nova plan offering that streamlines many of the features offered by a traditional 401(k) plan.Usually deemed to pass the Top Heavy nondiscrimination test.All employees can contribute up to the plan year maximum.Additionally, this plan design type will also permit any employee, including owners, to make salary deferrals up to the annual limits each year without concern of nondiscrimination testing results Safe Harbor plans require an employer match, which is always 100% vested, as part of the plan provisions. Basic match 3 formula (higher than with auto-enroll safe harbor)ĭrop in one of our branch locations or call our One Call Center at (888) 522-2265 for more information or to open an account.Find Your Retirement Plan Consultant Safe Harbor 401(k) PlanĪ Safe Harbor 401(k) Plan can benefit all employers, especially those concerned about passing annual IRS-required nondiscrimination tests.Annual participant deferral can be before-tax, Roth after-tax or both, depending on plan terms. Up to $20,500 2 catch-up contribution of $6,500 if age 50 or older. Maximum annual participant deferral (cannot exceed 100% of pay) Maximum annual allocation to participant’s accountġ00% of participant’s total pay or $61,000 1, whichever is less Maximum total plan contribution that the employer may deductĢ5% of total eligible payroll (maximum eligible pay per participant is $305,000) plus the amount of elective deferrals contributed Any employee with 1,000 hours of service within one year and who is age 21 or older must be covered exclusions are permitted for certain employees.All taxable businesses and tax-exempt organizations (excluding government entities) may establish 401(k) Plans.Participant deferral of current income taxes available or pre-payment of income taxes when using Roth option.No discrimination testing when safe harbor rules are met.Car, Truck, Boat, Motorcycle and RV Loans.CESA (Coverdell Education Savings Account).
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