Plan Design Expertise Tailored For You
Retirement Plans – Our goal is always to find the investment and administrative platform that meets your needs while keeping you out of the retirement plan business. Based upon your objectives, we can help you select the appropriate design from SIMPLE IRA to Safe Harbor 401(k) to more sophisticated designs such as new comparability profit sharing or defined benefit plans. To help meet your fiduciary responsibilities, we commit to periodic employee enrollments and investment seminars upon request.
Safe harbor 401(k) plan
A 401(k) plan exempt from nondiscrimination testing of elective and / or matching contributions in exchange for providing certain minimum levels of non-elective or matching contributions.
3% non-elective: company contributes an amount equal to 3% of each eligible employee’s compensation, or
Match: company matches $1.00 per dollar for the first 3% of compensation and employee contributions and $0.50 per dollar for the next 2% contributed.
Simplified administration, no discrimination testing required.
All employees can contribute up to 100% of compensation up to the annual IRS maximum, $17,500 for 2014; participants age 50 and over can contribute an additional “catch-up” amount up to $5,500 for 2014. The annual compensation limit is $260,000.
All safe harbor company contributions are immediately 100% vested.
Safe harbor contributions apply toward meeting top heavy requirements.
New comparability / cross-tested plan
A defined contribution plan where typically the plan participants are divided into two or more groups, and the employer contributions are based on a formula that takes into account a participant’s “group”, age (years to retirement) and compensation, resulting in varying contribution levels.
These differing levels of contributions may be considered nondiscriminatory if when the contribution allocation is converted into a projected benefit (as if the contribution was the amount needed to fund a defined benefit plan), the projected benefit passes a special “average benefits test”.
May permit substantial contributions for an, on average, older group (such as owners), yet require a much lower contribution for the younger and presumably lower paid employees
Employee demographics (and changes in) dictate this plan’s desirability
Requires a minimum contribution of either
5% of compensation for all eligible non-highly compensated employees, or
a lesser amount as long as the highest contribution any highly compensated employee receives is no more than three times what the lowest non-highly compensated employee’s contribution is
Contributions may be subject to a vesting schedule
May be combined with a 401(k) feature
Slightly more expensive than other DC plans due to the special plan document language and additional testing