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| New Comparability Plans can be established as stand-alone profit sharing plans where all contributions are funded by the employer. |
| Lower plan maintenance. Stand-alone plans require less maintenance since contributions are generally only funded once per year. |
| Vesting. With this plan design, all contributions are generally subject to vesting. |
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| Adding a 401(k) feature allows employees to contribute to their own retirement by making salary deferral contributions. |
| More plan maintenance. 401(k) plans require more work, since contributions are withheld from employee paychecks and funded throughout the year. |
| Lower employer funding costs. Adding a 401(k) feature can help to reduce funding costs for non-highly compensated employees. |
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New Comparability Plans that have 401(k) features can include Safe Harbor provisions, allowing them to automatically satisfy the ADP Test and ACP Test.
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| Eliminate Refunds to Highly Compensated Employees. Safe Harbor Plans automatically pass the ADP / ACP Tests and eliminate refunds to HCEs. |
| Vesting Considerations. Safe Harbor Plans require employers to make fully vested safe harbor contributions. |
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