IRS-approved 401(k) Easy prototype 401(k) plan allows for significant customization for small companies
Each 401(k) Easy system includes an IRS-approved prototype 401(k) plan that we work with you to customize to your 401(k) needs. Ours is NOT a cookie-cutter 401(k) plan with take-it-or-leave it investments like with some 401(k) plans designed for small businesses.
We offer free help with understanding each of your 401(k) 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 401(k) plan.
Within parameters set by law, you can have us edit your 401(k) features and prototype down the road. You are never locked into the decisions you make today.
The IRS offers an alternative means for achieving 401(k) plan balance: The safe harbor method of 401(k) plan operation lets 401(k) plans skip their annual 401(k) discrimination testing so long as the sponsoring employer meets certain employer 401(k) 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 401(k) 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 401(k) plan. Matching contributions, on the other hand, being based upon salary deferral amounts, are made only to active 401(k) 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.
If you don't choose the safe harbor method of 401(k) plan administration, we encourage you to use 401(k) 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. You can test your company's 401(k) plan for compliance any hour of the day or night, and day of the week, from any computer with Internet access.
The 401(k) Easy Roth 401(k) plan option
You are never locked into your 401(k) Easy option decisions
You are never locked into your 401(k) Easy plan and/or system design decisions. We have many clients that, for instance, exclude 401(k) loans in the early years of their plan, then add the option in at a later date.