A safe harbor 401 (k) is a popular project for small employers. It allows an employer to maximize contributions for highly compensated employees and to satisfy non-discrimination (and potentially top-heavy) the requirements for a minimum contribution for all eligible and / or staff involved. By providing a more generous employer contribution and vesting program, not employee benefits very balanced with a greater possibility for retirement.
There areto plan more formulas and methods for safe harbor. The best solution will vary from employer to employer. A consultant can determine the revision of a variety of scenarios, along with any constraints on the best strategy for every company. While there may be other options available are a safe harbor plan, the easiest way to manage on an ongoing basis and should not be so expensive you think.
A company can be a good candidate if they fail 1) routine annual ADP and ACPdiscrimination testing, 2) have a low participation or 3) are top-heavy. Under this agreement is the need for annual ADP and ACP tests are eliminated and the need to test top-heavy design of the plan can be eliminated.
If a company wants to change) an existing 401 (k a safe haven for 2009, closing date of December 1, 2008. It 'important process to start as soon as the notice requirements for employees and all documents must be be updated at leastaccordingly.
If you want more information on this or other topics of general retirement, so do not hesitate to contact Steve Lamb, Hicks pension services.
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