401k Easy - Plan Design Options

IRS-approved 401k Easy prototype 401k plan allows for significant customization for small companies

Each 401k Easy system includes an IRS-approved prototype 401k plan that we work with you to customize to your 401k needs. Ours is NOT a cookie-cutter 401k plan with take-it-or-leave it investments like with some 401k plans designed for small businesses.

We offer free help with understanding each of your 401k plan customization options, so you can make educated decisions as to what will be best for your company and its employees. For help with specific topics, we recommend completing the appropriate Order Form and mark "Unsure. Please contact..." for relevant items. Completing an Order Form IN NO WAY obligates you to purchasing anything; it simply gives us the information we need about your company's size, etc., to answer questions regarding your potential 401k plan.

Within parameters set by law, you can have us edit your 401k plan down the road, if you like. You are never locked into the decisions you find suitable today. (If any edits you later have us make to your 401k plan mean re-customization of your 401k plan administration software and/or amendment of your official 401k Plan Adoption Agreement, we reserve the right to charge a fee of up to $500 for system re-customization; re-customization fees are a function of the complexity of the system and document changes required, and in most case are less than $200, if not waived completely.)

The 401k Easy safe harbor plan option

The IRS offers an alternative means for achieving 401k plan balance: The safe harbor method of 401k plan operation lets 401k plans skip their annual 401k discrimination testing so long as the sponsoring employer meets certain employer 401k contribution requirements that are designed to ensure broad participation in the company plan; the employer, too, must provide 100% immediate vesting of the contributions.

To qualify a 401k plan as a safe harbor plan, an employer must make matching contributions that fulfill the below requirements or make nonselective contributions equal to 3% of each eligible employee's compensation.
Nonselective contributions are made to all eligible employees, regardless of if the employees participate in the company 401k plan. Matching contributions, on the other hand, being based upon salary deferral amounts, are made only to active 401k participants' accounts.
If the employer chooses to make safe harbor matching contributions, those contributions must meet two requirements: First, each non-highly-compensated employee must receive a dollar-for-dollar match on salary deferrals up to 3% of compensation and a 50¢ to the dollar match on salary deferrals from 3% to 5% of compensation. Second, the rate of any matching contributions being made to highly compensated employees cannot exceed that being made to non-highly compensated employees.

The employer must provide annual information to employees explaining the 401k plan's safe harbor provisions and benefits, including that safe harbor contributions cannot be distributed before termination of employment and that they are not eligible for financial hardship withdrawal.

Your 401k Easy system includes such notification within your customized 401k plan's Summary Plan Description, a document for prospective and active plan participants.

If you don't choose the safe harbor method of 401k plan administration, we encourage you to use 401k Easy's online point-and-click compliance testing every month to keep well apprised of your plan's health so there are no surprises when your plan is subjected to its mandatory year-end tests.
Monthly testing takes only seconds with 401k Easy, and frequent testing means you can spot and correct undesirable trends before they compound.
You can test your company's 401k plan for compliance any hour of the day or night, and day of the week, from any computer with Internet access.

The 401k Easy Roth 401k plan option

You are never locked into your 401k Easy option decisions

You are never locked into your 401k Easy plan and/or system design decisions. We have many clients that, for instance, exclude 401k loans in the early years of their plan, then add the option in at a later date.

Know that you can have us modify your plan and system design at any time. We do reserve the right to charge for changes initiated by you that require us to re-customize your 401k online software and/or official 401k documents. The maximum charge for re-customization work is $200 per instance and depends upon the complexity of the changes required.