Retirement Designs - Retirement Plan Types and Contribution Limits

Retirement Plan Types and Contribution Limits

Selecting the “right” plan type is a central step in offering retirement benefits to employees. Differences in deferral amounts, employer contributions, eligibility, and vesting are all components for consideration before implementation. Our team will detail plan features and design variations, to help you determine the “best fit” retirement program.

	Traditional 401k	Safe Harbor 401k	SIMPLE IRA
Maximum Business Size	No Limit	No Limit	Up to 100 Employees
Individual Contribution Limit	$16,500 in 2011, 2012	$16,500 in 2011, 2012	$11,500 in 2011, 2012
Catch-up Contributions	$5,500 in 2011, 2012	$5,500 in 2011, 2012	$2,500 in 2011, 2012
Discrimination Testing	Yes	No	No
Mandatory Employer Matching	No	Yes, 4% of salary if employee saves 5% or 3% for all employees	Yes, 1% to 3% of salary for match or 2% for all employees
Loans Permitted	Yes	Yes	No
Hardship Withdrawals	Yes	Yes	Special Purpose Distributions
Vesting	Up to 6 years for match, up to 7 years for profit sharing	Immediate for required match or non-elective	Immediate
Eligibility Max	1 year, age 21, 1,000 hours max	1 year, age 21, 1,000 hours max	Employees earning $5000 in any preceding 2 years & expected to earn $5000 in current
Rollovers To/From Other Retirement Accounts	Yes	Yes	To: only from another SIMPLE IRA From: after 2 years to avoid penalty
Permitted Employer Additional Contribution up to 25% of Pay	Yes, not to exceed $49,000 in 2011, 2012	Yes, not to exceed $49,000 in 2011, 2012	No
Administration	Most	Medium	Least
IRS Tax From 5500	Yes	Yes	No
Establishment Deadline	By the last day of the plan year for which the plan is effective	Any date between January 1 and October 1; may not have an effective date that is before the date plan actually adopted	Any date between January 1 and October 1; as soon as administratively feasible for businesses established after October 1st

Figures as shown are available on the IRS website at: http://www.irs.gov/retirement/sponsor/article/0,,id=151925,00.html. Highly Compensated Employees, those whose salary is above $110,000 in 2011, are subject to a second contribution limit under a traditional 401k. This limit is the average deferral percentage (ADP) testing and can be explained by the administrator in detail.

Important Information

All administrative and record keeping services are offered by PB&H Benefits, LLC. The custodian trust company is Mid Atlantic Trust Company (MATC), providing a state-of-the art trading and reporting system that integrates record keeping, trust accounting, and straight-through processing with access to over 16,000 mutual funds in underlying accounts. All investments are offered by Registered Representatives of MML Investors Services, LLC, Securities are distributed through MML Investors Services, LLC, Member, SIPC. Supervisory Office: 2 Bala Plaza Suite 901 Bala Cynwyd, PA 19004 Tel (610) 660 9922. Investment education is provided by Registered Representatives of MML Investors Services, LLC. Note that our role as financial professionals, with respect to the 401k plan, is not to provide investment advice. We offer employee education including fund information and portfolio design using models that match the employee's intended level of risk and investment goals. In no way do we endorse any recommendations, advice, or opinions contained in Information developed by third party providers and mentioned in this website. We merely provide access to such information as a convenience to help you consider your design and investment selections. Any investment decisions you make are based solely upon your evaluation of financial circumstances and investment objectives, in the best interests of your Plan. Mutual Funds are sold by prospectus. You should carefully consider a fund’s investment objectives, charges, expenses, and risks before investing. The fund's prospectus, which can be obtained online (or hard copy) by calling your Registered Representative, contains this information and other facts about the fund. Please read the prospectus carefully before you invest or send money. We do not offer tax planning or legal advice. Please consult your CPA or attorney for specific tax implications and legal matters pertaining to your Plan.

Registered Representative Information

John M. Novak is a Registered Representative of and offers securities and investment advisory services through MML Investors Services, LLC, Member, SIPC. Supervisory Office:
First Financial Group
2 Bala Plaza Suite 901
Bala Cynwyd, PA 19004
Tel (610) 766 3014 Administrative and record keeping services offered by PB&H Benefits, LLC, and custodian services offered by Mid Atlantic Trust Company are not sponsored or offered through First Financial Group or MML Investors Services, LLC. PB&H and MATC are not affiliates or subsidiaries of MML Investors Services, LLC.

Click to return to the Homepage.

Use this to open or close the entire menu to see where you are.

To Submit Questions Through This Site
Note: All inquiries are scheduled to be answered within the same business day.

Use this to find a specific retirement plan topic anywhere in the site.

Send this link to a friend or business associate

Open up this page as a printer-friendly version

Generate this page as a PDF for download