Broker Check

Qualified Plans

Your Retirement Plan Partner

Your Retirement Plan Partner

Working together on behalf of your employees' retirement readiness

Our Approach<br/>

Our Approach

We are committed to providing top-tier employer services focused on your company goals, while educating and empowering employees to confidently save for their retirement future.

Why offer a RETIREMENT PLAN?

Why offer a RETIREMENT PLAN?

  • Maximize employer contributions
  • Help your employees save for retirement
  • Help reduce taxes
  • Recruit, retain and attract top employee talent

In a tight labor market, strengthening benefits is a way to recruit & retain top talent

66% of workers say they are more likely to stay with their employer if they offer a financial wellness program*

Engaged employees are less likely to job hunt*

*John Hancock. "Stress, Finances, and Well-being" 2022.

How We Support You

Fiduciary Guidance

Learn more

Financial Wellness

Learn more

Investment Strategy

Learn more

Vendor Relationships

Learn more

Plan Design Education

Learn more

This information was developed as a general guide to educate plan sponsors, but is not intended as authoritative guidance or tax or legal advice. Each plan has unique requirements, and you should consult your attorney or tax advisor for guidance on your specific situation. In no way does advisor assure that, by using the information provided, plan sponsor will be in compliance with ERISA regulations.

401(k) Plans

401(k) Plans

A 401(k) is a feature of a qualified profit-sharing plan that allows employees to contribute a portion of their wages to individual accounts.

Elective salary deferrals are excluded from the employee’s taxable income (except for designated Roth deferrals). Employers can contribute to employees’ accounts.

Distributions, including earnings, are includible in taxable income at retirement (except for qualified distributions of designated Roth accounts).

SIMPLE 401(k) Plans

SIMPLE 401(k) Plans

A subset of the 401(k) plan is the SIMPLE 401(k) plan. Just like the SIMPLE IRA plan, this is a plan just for you: the small business owner with 100 or fewer employees. However, just as with the SIMPLE IRA plan, there is a two-year grace period if you exceed 100 employees, to allow for growing businesses.

Under a SIMPLE 401(k) plan, an employee can elect to defer some compensation. But unlike a regular 401(k) plan, you the employer must make either:

A matching contribution up to 3% of each employee’s pay, or
A non-elective contribution of 2% of each eligible employee’s pay.
No other contributions can be made. The employees are totally vested in any and all contributions

If you establish a SIMPLE 401(k) plan, you:

  • Must have 100 or fewer employees.
  • Cannot have any other retirement plans.
  • Need to annually file a Form 5500.
  • The IRS has issued Model Amendments for SIMPLE 401(k) plans. These Model Amendments permit a 401(k) plan to become a SIMPLE 401(k) plan (if the other requirements are met).

Pros and cons

  • Plan is not subject to the non-discrimination rules that apply to everyday 401(k) plans.
  • Employees are fully vested in all contributions.
  • Straightforward benefit formula allows for easy administration.
  • Optional participant loans and hardship withdrawals add flexibility for employees.
  • No other retirement plans can be maintained.
  • Withdrawal and loan flexibility adds administrative burden for the employer.

SEP Plans

A SEP plan allows employers to contribute to traditional IRAs (SEP-IRAs) set up for employees. A business of any size, even self-employed, can establish a SEP.

Profit-Sharing Plans

Profit-Sharing Plans

A profit-sharing plan accepts discretionary employer contributions. There is no set amount that the law requires you to contribute. If you can afford to make some amount of contributions to the plan for a particular year, you can do so. Other years, you do not need to make contributions. Also, your business does not need profits to make contributions to a profit-sharing plan.

If you do make contributions, you will need to have a set formula for determining how the contributions are divided. This money goes into a separate account for each employee.

One common method for determining each participant’s allocation in a profit-sharing plan is the “comp-to-comp” method. Under this method, the employer calculates the sum of all of its employees’ compensation (the total “comp”). To determine each employee’s allocation of the employer’s contribution, you divide the employee’s compensation (employee “comp”) by the total comp. You then multiply each employee’s fraction by the amount of the employer contribution. Using this method will get you each employee’s share of the employer contribution.

If you establish a profit-sharing plan, you:

  • Can have other retirement plans
  • Can be a business of any size
  • Need to annually file a Form 5500
  • As with 401(k) plans, you can make a profit-sharing plan as simple or as complex as you want. You may purchase a pre-approved profit-sharing plan document from a benefits professional or financial institution to cut down on administrative headaches.

Pros and cons

  • Flexible contributions – contributions are strictly discretionary
  • Good plan if cash flow is an issue
  • Administrative costs may be higher than under more basic arrangements (SEP or SIMPLE IRA plans)
  • Need to test that benefits do not discriminate in favor of the highly compensated employees.
Defined Benefit Plans

Defined Benefit Plans

Defined benefit plans provide a fixed, pre-established benefit for employees at retirement. Employees often value the fixed benefit provided by this type of plan. On the employer side, businesses can generally contribute (and therefore deduct) more each year than in defined contribution plans. However, defined benefit plans are often more complex and, thus, more costly to establish and maintain than other types of plans.

If you establish a defined benefit plan, you:

  • Can have other retirement plans
  • Can be a business of any size
  • Need to annually file a Form 5500 with a Schedule SB
  • Have an enrolled actuary determine the funding levels and sign the Schedule SB
  • Can’t retroactively decrease benefits

Pros and cons

  • Substantial benefits can be provided and accrued within a short time – even with early retirement
  • Employers can contribute (and deduct) more than under other retirement plans
  • Plan provides a predictable benefit
  • Vesting can follow a variety of schedules from immediate to spread out over seven years
  • Benefits are not dependent on asset returns
  • Plan can be used to promote certain business strategies by offering subsidized early retirement benefits
  • Most costly type of plan
  • Most administratively complex plan
  • An excise tax applies if the minimum contribution requirement is not satisfied
  • An excise tax applies if excess contributions are made to the plan
Money Purchase Plans

Money Purchase Plans

Money purchase plans have required contributions. The employer is required to make a contribution to the plan each year for the plan participants.

With a money purchase plan, the plan states the contribution percentage that is required. For example, let’s say that your money purchase plan has a contribution of 5% of each eligible employee’s pay. You, as the employer, need to make a contribution of 5% of each eligible employee’s pay to their separate account. A participant’s benefit is based on the amount of contributions to their account and the gains or losses associated with the account at the time of retirement.

That type of arrangement is different than a profit-sharing plan. With the profit-sharing plan, you, the employer, can decide that you’ll contribute a certain amount, say $10,000. Then, depending on the plan’s contribution formula, you allocate that $10,000 to the separate accounts of the eligible employees. Also, in past years, money purchase plans had higher deductible limits than profit-sharing plans. This is no longer the case.

If you establish a money purchase plan, you:

  • Can have other retirement plans.
  • Can be a business of any size.
  • Need to annually file a Form 5500.
  • You can make a money purchase plan as simple or as complex as you want. Pre-approved money purchase plans are available to cut down on administrative headaches.

Pros and cons

  • Possible to grow larger account balances than under some other arrangements.
  • Administrative costs may be higher than under more basic arrangements.
  • Need to test that benefits do not discriminate in favor of the highly compensated employees.
  • An excise tax applies if the minimum contribution requirement is not satisfied.
Employee Stock Ownership Plans (ESOPs)

Employee Stock Ownership Plans (ESOPs)

An employee stock ownership plan (ESOP) is an IRC section 401(a) qualified defined contribution plan that is a stock bonus plan or a stock bonus/money purchase plan. An ESOP must be designed to invest primarily in qualifying employer securities as defined by IRC section 4975(e)(8) and meet certain requirements of the Code and regulations. The IRS and Department of Labor share jurisdiction over some ESOP features.

Governmental Plans

Governmental Plans

Under Internal Revenue Code (IRC) Section 414(d), a governmental plan is an IRC Section 401(a) retirement plan established and maintained for the employees of:

the United States or its agency or instrumentality,
a state or political subdivision, or its agency or instrumentality, or
an Indian tribal government or its subdivision, or its agency or instrumentality (participants must substantially perform services essential to governmental functions rather than commercial activities).
Other types of governmental plans include:

403(b) tax-sheltered annuity plans,
457 deferred compensation plans,
Certain grandfathered 401(k) plans adopted by a governmental entity before May 6, 1986.

457 Plans

457 Plans

Plans of deferred compensation described in IRC section 457 are available for certain state and local governments and non-governmental entities tax exempt under IRC Section 501. They can be either eligible plans under IRC 457(b) or ineligible plans under IRC 457(f). Plans eligible under 457(b) allow employees of sponsoring organizations to defer income taxation on retirement savings into future years. Ineligible plans may trigger different tax treatment under IRC 457(f).

Multiple Employer Plans

Multiple Employer Plans

A multiple employer plan is a plan maintained by two or more employers who are not related.

News & Articles

Build a 401(k) Dream Team with the Power of Partnership

Build a 401(k) Dream Team with the Power of Partnership

Read Article
Don't Miss Out: SECURE Act Tax Credits &#38; 401(k) Plan Features

Don't Miss Out: SECURE Act Tax Credits & 401(k) Plan Features

Read Article

Let Us Lend a Helping Hand

Thank you!
Oops!