Company Retirement Plan Comparison

//Company Retirement Plan Comparison
Company Retirement Plan Comparison2018-07-05T22:14:14+00:00
SEP IRA (Simplified
Employee Pension)
SIMPLE IRA (Savings
Incentive Match Plan
Solo 401(k)401(k) PlanSafe Harbor 401(k) PlanProfit Sharing PlanCash Balance Plan Defined Benefit Plan403(b) Plan457(b) Tax Deferred Funded Plans
Plan TypeIRA BasedIRA BasedDefined ContributionDefined ContributionDefined ContributionDefined ContributionDefined BenefitDefined BenefitDefined ContributionDefined Contribution
Ideal forCompanies that do not want the costs of a qualified plan. The company is willing to fund 100% of the plan contributions.Companies with fewer than 100 employees that do not want the costs of a qualified plan.Company with no eligible employees.Companies wanting a plan that allows employee elective salary deferrals and the possibility for employer contributions.Companies who wish to avoid ADP/ACP and top-heavy discrimination tests.Companies that wish to contribute beyond the limits of a 401(k) plan - often designed to benefit owners and key executives in a tax advantageous manner.Companies that wish to contribute significantly more than defined contribution plans generally benefiting owners in a tax advantageous manner.Same characteristics as cash balance plan with participant statements reflected as monthly income at retirement.For certain employees of public schools, employees of certain Code Section 501(c)(3) tax-exempt organizations and certain ministers. The organization must be a state or local government or a tax-exempt organization under IRC 501(c).
Employer Contribution Limits (2019) Not required. Maximum contribution cannot exceed the lesser of 25% of compensation or $56,000Employer must make either a matching contribution or a nonelective contributionNot required. Maximum contribution is 25% of compensation not to exceed $56,000 ($62,000 is age 50 or over) which includes the 401k contribution Not required. The plan can provide a match or profit sharing contributionRequired
1. 100% on the first 3% plus 50% on the next 2% of employee compensation
OR
2. 3% of compensation to all eligible employees
Not required.
Maximum contribution is 25% of eligible employee compensation not to exceed $56,000
Required - contribution amounts are calculated based on age, compensation and other actuarial factorsRequired - contribution amounts are calculated based on age, compensation and other actuarial factorsNot required. The plan can provide a match or profit sharing contributionNot required
Employee Contribution Limits (2019)Not applicableYes, $13,000 (plus $3,000 catch-up contribution, if over 50)Yes, $19,000 (plus $6,000 catch-up contribution, if over 50) Yes, $19,000 (plus $6,000 catch-up contribution, if over 50) Yes, $19,000 (plus $6,000 catch-up contribution, if over 50) Not applicableNot applicableNot applicableYes, $19,000 (plus $6,000 catch-up contribution, if over 50) Yes, up to $19,000 (special catch-up rules apply)
Contribution $ Limits (2019)$56,000Depends on employer contribution method selected$56,000 (plus $6,000 catch-up contribution)$56,000 (plus $6,000 catch-up contribution)$56,000 (plus $6,000 catch-up contribution)$56,000Actuarily determinedActuarily determined$56,000 (plus $6,000 catch-up contribution)$19,000 (special catch-up rules apply)
Last Date for ContributionsDue date of employer's tax return
(including extensions)
Salary Deferral: As soon as administratively feasible, but in no event later than 30 days after the end of the month for which the contributions are to be made
Employer Contribution: Due date of the employer's tax return (including extensions)
Salary Deferral: If incorporated, no later than seven business days from payroll withholding (DOL safe harbor rule). If unincorporated, generally by the 2nd week of January after year-end.
Employer Contribution: Due date of the employer's tax return (including extensions)
Salary Deferral: If incorporated, no later than seven business days from payroll withholding (DOL safe harbor rule). If unincorporated, generally by the 2nd week of January after year-end.
Employer Contribution: Due date of the employer's tax return (including extensions)
Salary Deferral: If incorporated, no later than seven business days from payroll withholding (DOL safe harbor rule). If unincorporated, generally by the 2nd week of January after year-end.
Employer Contribution: Due date of the employer's tax return (including extensions)
Due date of the employer's tax return (including extensions) to be eligible for a tax deduction for the prior yearNo later than 8 ½ months after the end of the Plan yearContributions: On or before employer’s
due date for filing federal tax returns (including extensions)
If employer contributions are allowed, the same rules apply as 401(k) Plans. If only salary deferrals, then generally as soon as administratively feasibleSalary Deferral: As soon as administratively feasible. Employer contribution: Employer’s discretion
Plan Setup DeadlineAnytime up to the due date of employer's tax return (including extensions)Anytime between January 1st and October 1st of the calendar year. As soon as administratively feasible for new employers coming into existence after October 1stBy the last day of the plan year for which the plan is effectiveBy the last day of the plan year for which the plan is effectiveAny date between January 1st and October 1st - may not have an effective date that is before date plan was actually adoptedBy the last day of the plan year for which the plan is effectiveBy the last day of the plan year for which the plan is effectiveBy the last day of the plan year for which the plan is effectiveIf employer contributions allowed, by the last day of the Plan year for which the Plan is effectiveThe date the Plan is effective
Form Used to Establish Plan5305-SEP or SEP paperwork provided by financial institution5304-SIMPLE (employees select financial institution) or 5305-SIMPLE (employer selects a single financial institution)Plan
document
Plan
document
Plan
document
Plan documentPlan documentPlan documentPlan document if employer contributions are allowed; otherwise, can be established using forms and agreements of financial institutionGenerally a Plan document