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Plan Types
Following is a list of qualified retirement plan types that are available for administration at AmeriBen/IEC Group
A 401(k) plan permits a cash or deferred arrangement as part of an employer’s profit sharing or stock bonus plan. The arrangement is typically in the form of salary reduction between the employer and employee under which a contribution will be made only if the employee elects to reduce his compensation or forgo a salary increase. Special non-discrimination tests apply.
Safe Harbor plans are 401(k) plans, which provide the availability for owners and highly compensation employees who want to maximize their own elective deferrals and/or match and have been limited due to the ADP and/or ACP tests. A plan document can be written to allow the plan to be excluded from performing the ADP and/or ACP tests.
A Profit Sharing plan is a defined contribution plan into which employer makes discretionary contributions on behalf of employees. All contributions plus earnings are allocated to individual accounts, which determine the individual’s benefit at retirement. The formula for determining the amount of the employer’s contribution may be fixed (such as a required percentage of profits or payroll), fully discretionary, or a combination of both.
A New Comparability plan is a defined contribution plan that is set up to for owners who want to maximize their individual retirement account while minimizing the overall costs to the company. New comparability plans can include a 401(k) feature as well as a safe harbor feature.
A Money Purchase plan is a defined contribution plan into which the employer contributions are mandatory and are usually based solely on each participant’s compensation. The obligation to fund the plan makes the plan different from a profit sharing plan. If the company fails to make a contribution, a penalty tax to the company could be imposed.
ESOPs allow employees to become stockholders in the company through employer contributions of the company stocks and are also governed by many complex rules. These plans provide benefits similar to those of profit sharing plans. Contributions by the employer are not necessarily dependent on profits. Contributions to these plans must primarily be made in shares of company stock.
A 403(b) plan is a defined contribution plan available to tax-exempt organizations and public schools. It is also referred to as a tax-sheltered annuity (TSA) or a tax-deferred annuity (TDA). The 403(b) plan permits employees to contribute to their own retirement by setting aside funds on a pre-tax basis.
Feel free to contact us about our service anytime by e-mail at pensions@ameriben.com or call toll free at 1-888-716-4481
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