Plan Sponsor Login

TYPES OF PLANS

Defined Benefit Plans Profit Sharing Plans 401(k) Plans Safe Harbor 401(k) Plans Solo 401(k) Plans SIMPLE Plans SEP Plans Payroll Deduction IRA
Key Advantages Provides fixed, pre-established benefit for employees. Highest contribution limits. Permits employer to make large contributions for employees, but employer contributions are fully discretionary. Permits employee to contribute more than in other options. Permits employee to contribute more than in other options without annual discrimination testing. Salary reduction plan for business with no non-owner employees. Higher contribution limits than SEP or SIMPLE plans. Salary reduction plan with little administrative paperwork. Not subject to discrimination testing. Can be set up as a SIMPLE IRA or SIMPLE 401(k). Easy to set up and maintain. Not subject to discrimination testing. Easy to set up and maintain, no plan document needed. Not subject to discrimination testing.
Target Market Employers who want a tax advantaged way to transfer the highest level of profit out of the enterprise. Employers who want to offer more than one type of retirement plan. Employers who want to make all the contributions, but want flexibility in amounts. Employers seeking to transfer profits out of the enterprise in a tax-advantaged way. Employers who want to offer more than one type of retirement plan. Employers who want a salary reduction plan with optional employer contributions. Employers who want a salary reduction plan without annual discrimination testing and with required employer contributions. Employers with non non-owner employees who seek higher contribution limits than other plans. Employers (generally with 100 or fewer employees) who want a salary reduction plan but with less administration than a traditional 401(k) Plan. Employers who want flexible annual contribution obligations. Employers who want to offer a retirement plan option with minimal cost and where only the employee makes contributions. Usually samll businesses.
Can Employer Sponsor Other Qualified Retirement Plans Yes Yes Yes Yes Yes No No Yes
Who Can Contribute Employer only, employee contributions generally not allowed (though plan design can permit or require employee contributions.) Employer only, employee contributions not allowed. Employer and employee, fully discretionary. Employer mandatory (matching only or for all employees) and employee discretionary. Employer and employee contributions are discretionary. Employer mandatory, employee discretionary. Employer only, employee contributions not allowed. Employee only.
Employee Eligibility Age requirement cannot exceed 21; service requirement cannot exceed two years (at least 1,000 hours in a year). Age requirement cannot exceed 21; service requirement cannot exceed one year, two years if 100% vested. Age requirement cannot exceed 21; service requirement cannot exceed one year. Age requirement cannot exceed 21; service requirement cannot exceed one year. Age requirement cannot exceed 21; service requirement cannot exceed one year. No age requirement. All employees who have earned at least $5,000 in the previous two years and who are reasonably expected to earn at least $5,000 in the current year. All employees who are at least 21 years old, employed by the business for 3 of the last 5 years and earned at least $550 in the current year. No age requirement. All employees who have earned compensation in the current year.
Minimum Employee Coverage Must be offered to all employees who are at least 21 years old, who worked at least 1,000 hours in the previous year. Must be offered to all employees who are at least 21 years old, who worked at least 1,000 hours in the previous year. Must be offered to all employees who are at least 21 years old, who worked at least 1,000 hours in the previous year. Must be offered to all employees who are at least 21 years old, who worked at least 1,000 hours in the previous year. Owners and Spouses Must be offered to all employees who have earned at least $5,000 in the previous two years and who are reasonably expected to earn at least $5,000 in the current year. Must be offered to all employees who are at least 21 years old, employed by the business for 3 of the last 5 years and earned at least $550 in the current year. Must be offered to all employees.
Cost Index Most costly. Low to high depending on plan design complexity. Low to high depending on plan design complexity. Low to Medium. Low to Medium. Low to Medium. Low Least costly.
2010 Contribution Limits Employer: Deduction limit is any amount up to the plan's unfunded current liability based on actuarial computations. Employees: Employer can permit or require employee contributions based on plan design. Employer: Total contribution per employee is a maximum of $49,000 or 100% of compensation. Employer can deduct up to 25% of aggregate compensation for all participants (if self employed, 25% minus half the self-employement tax). Employer: Total contribution per employee is a maximum of $49,000 (employer + employee) or 100% of compensation. This amount includes employee contribution. Employer can deduct up to 25% of aggregate compensation for all participants (if self-employed, 25% minus half the self-employment tax). Employees: up to $16, 500. Employer: Total contribution per employee is a maximum of $49,000 (employer + employee) or 100% of compensation. This amount includes employee contribution. Employer can deduct up to 25% of aggregate compensation for all participants (if self-employed, 25% minus half the self-employment tax). Employees: up to $16, 500. Employer: Total contribution per employee is a maximum of $49,000 (employer + employee) or 100% of compensation. This amount includes employee contribution. Employer can deduct up to 25% of aggregate compensation for all participants (if self-employed, 25% minus half the self-employment tax). Employees: up to $16, 500. Employer: (two options): Matching: dollar-for-dollar of employee contribution up to 3%. Non-Elective: A flat 2% of compensation for all employees regardless of employee contributions. Employees: up to $11,500. Employer: Up to 25% of compensation or a maximum of $49,000 (if self-employed, 25% minus half the self-employment tax.) Employees: up to $5,000
Catch Up Provision for Employees Over 50 Not available. Not available Additional $5,500 for 2010. Additional $5,500 for 2010. Additional $5,500 for 2010. Additional $2,500 for 2010. Not available. Additional $1,000 for 2010.
Who Directs Investments Employer/Trustee Employer/Trustee or plan may allow for individuals to direct investments. Employer/Trustee or plan may allow for individuals to direct investments. Employer/Trustee or plan may allow for individuals to direct investments. Individual. Individual. Individual. Individual.
Set-Up, Reporting and Administration There is no model form to set up plan (consult an employee benefit advisor or financial institution). File IRS Form 5500 annually. May need to make other ERISA filings. Actuary must determine plan funding obligations and certify Schedule B of Form 5500. May require Pension Benefit Guarantee Corporation coverage and fidelity bonding. There is no model form to set up plan (consult an employee benefit advisor or financial institution). File IRS Form 5500 annually. ADP and "top-heavy" testing NOT required. There is no model form to set up plan (consult an employee benefit advisor or financial institution). File IRS Form 5500 annually. ADP and "top-heavy" testing required. There is no model form to set up plan (consult an employee benefit advisor or financial institution). File IRS Form 5500 annually. ADP and "top-heavy" testing NOT required. There is no model form to set up plan (consult an employee benefit advisor or financial institution). File IRS Form 5500-EZ annually, once plan assets reach $100,000. ADP and "top-heavy" testing NOT required. Set up by completing IRS Form 5304-SIMPLE or Form 5305-SIMPLE. No employer tax filing required for SIMPLE IRA Plan. File IRS Form 5500 annually for SIMPLE 401(k) Plan. ADP and "top-heavy" testing NOT required. Set up by completing IRS Form 5305-SEP. No employer tax filing required. ADP testing NOT required. Set up payroll deduction plan for contributions to employee's IRA. No employer tax filing required. ADP testing NOT required.
Establishment & Funding Deadlines By the last day of the play year for which the plan is effective. Employer contributions must be made before 8 1/2 months after the end of the plan year or the filing of the corporate tax return. By the last day of the plan year for which the plan is effective. By the last day of the plan year for which the plan is effective. Employer contributions must be made by the time the corporate tax return (with extensions) is filed for the tax year in which the deduction is taken. Any date between January 1 and October 1; may not have an effective date that is before the date that the plan is actually adopted. Employer contributions must be made by the time the corporate tax return (with extenstions) is filed for the tax year in which the deduction is taken. By the last day of the plan year for which the plan is effective. Employer contributions must be made by the time the corporate tax return (with extensions) is filed for the tax year in which the deduction is taken. Any date between January 1 and October 1; may not have an effective date that is before the date that the plan is actually adopted. Employer contributions must be made by the time the corporate tax return (with extenstions) is filed for the tax year in which the deduction is taken. Established by the time the corporate tax return (with extensions) is filed for the tax y ear in which the deduction is taken. Not Applicable.
Withdrawals and Loans Cannot take withdrawals until a specified event (reaching 59 1/2, death, disability, separation, etc.) as identified in the plan; may permit loans and hardship withdrawals subject to current federal income taxes and possible 10% penalty for early withdrawal if participant is under 59 1/2. Cannot take withdrawals until a specified event (reaching 59 1/2, death, disability, separation, etc.) as identified in the plan; may permit loans and hardship withdrawals subject to current federal income taxes and possible 10% penalty for early withdrawal if participant is under 59 1/2. Cannot take withdrawals until a specified event (reaching 59 1/2, death, disability, separation, etc.) as identified in the plan; may permit loans and hardship withdrawals subject to current federal income taxes and possible 10% penalty for early withdrawal if participant is under 59 1/2. Cannot take withdrawals until a specified event (reaching 59 1/2, death, disability, separation, etc.) as identified in the plan; may permit loans and hardship withdrawals subject to current federal income taxes and possible 10% penalty for early withdrawal if participant is under 59 1/2. Cannot take withdrawals until a specified event (reaching 59 1/2, death, disability, separation, etc.) as identified in the plan; may permit loans and hardship withdrawals subject to current federal income taxes and possible 10% penalty for early withdrawal if participant is under 59 1/2. Withdrawals anytime; subject to current federal income taxes and possible 25% penalty for early withdrawal if participant is under 59 1/2 and within first two years of participation, 10% penalty thereafter. Withdrawals anytime; subject to current federal income taxes and possible 10% penalty for early withdrawal if participant is under 59 1/2. Withdrawals anytime; subject to current federal income taxes and possible 10% penalty for early withdrawal if participant is under 59 1/2.
Vesting May vest over time according to plan terms. May vest over time according to plan terms. Employee contributions vest immediately. Employer contributions may vest over time according to plan terms. Employee contributions vest immediately and most employer contributions vest immediately. Some employer contributions may vest over time according to plan terms. Immediate, 100%. Immediate, 100%. Immediate, 100%. Immediate, 100%.