There are several types of safe harbor contributions for defined contribution plans. Here is a breakdown of each of the types available.
Safe Harbor Contributions for Defined Contribution Plans
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401(k) Plans
A 401(k) plan helps your employees save for their future by giving them the opportunity to invest a portion of their paycheck into an employer-sponsored retirement account. Employees can select to invest either pre-tax or after-tax dollars into diversified investment lineup within their 401(k) portfolio. Many 401(k) plans offer employer matching, to entice employees to contribute a specific percentage of their paycheck into the plan in exchange for a matching investment from you, their employer. Employer 401(k) benefits include tax deductions and competitive retirement plan packages to attract top talent to your team. Curious about 401(k) plan options, regulatory details, and contribution rules? Head over to the Watkins Ross blog to browse 401(k) articles written by our retirement plan experts who have your goals and interests in mind. Looking for a retirement plan partner who understands the intricacies of your business and can help guide your 401(k) plan goals and compliance efforts? Connect with the Watkins Ross retirement team here.
Starting a 401(k) Plan
Starting a 401(k) plan is a popular choice to help employees prepare for retirement, but can also help attract the talent needed to grow your business.
What A Failed ADP/ACP Test Means
If you want to maximize contributions for the Highly Compensated Employees, don’t stress (or panic!) at the thought of failing the ADP/ACP testing.
401(K) Plan Nondiscrimination Testing
To ensure a 401(k) plan is not favoring owners or highly paid employees, the IRS requires certain nondiscrimination testing is performed (ADP/ACP testing).
Required Minimum Distributions From Defined Contribution Plans
Once you reach age 70 ½, the IRS requires you to take money out of your retirement account. This withdrawal is called a Required Minimum Distribution (RMD). Most people don’t give RMDs much thought until they have to take one. Required Beginning Date For defined...
Plan Forfeitures and Safe Harbor Contributions
Your retirement plan was recently restated for the Pension Protection Act (PPA). Within the PPA restatement, IRS mandated that forfeitures could no longer be used to reduce safe harbor contributions (i.e. basic safe harbor match, enhanced match or 3% nonelective). On...
401(k) Plans: Fast Facts & Planning Tips
The National Retirement Planning Coalition has designated April 11-15 as the 2016 National Retirement Planning week. In celebration, each day this week Watkins Ross will share some fast facts and planning tips on the various types of retirement plans we service....
Safe Harbor Plans: is it Safe to Amend?
If you have a safe harbor plan and wanted to make a change during the year, the IRS restricted what you could and could not amend, even if the change didn’t affect the safe harbor provisions. Recently, the IRS issued additional guidance for both traditional and...
What is a Cross-Tested Plan?
A cross-tested plan is a type of retirement plan which favors older, long-term employees who are closer to retirement age.
2015 401(a)(17) Compensation Limit
Section 401(a)(17) provides an annual compensation limit for each employee under a qualified plan.