Plan Designs

401(k) plans are highly flexible and can be customized to meet your company’s retirement benefits objectives. Most plans and features are tailored based on one of three core plan designs. Safe Harbor 401(k) plans ensure that your retirement plan automatically satisfies IRS discrimination testing and requires immediate vesting of employer contributions. Traditional Plans 401(k)s offer options for vesting, matching at various levels, or not at all. Advanced profit sharing or tiered profit sharing offer added ways to compensate your employees through their retirement plan. The chart below provides a quick overview:

	Traditional 401k	Safe Harbor 401k	Tiered Profit-Sharing 401k
Best for…	Flexible matching, vesting, and profit sharing options	Ensuring owners and highly compensated employees can contribute to the plan without restriction and the plan automatically satisfies IRS testing	Rewarding employees by group, tenure, or age
Matching is…	Optional, but may limit owner contributions	Required	Likely, depending on plan configuration
Profit Sharing option	Standard option available	Standard option available	Advanced Profit-Sharing options
IRS testing is…	Required	Satisfied and not required	Varies by plan
Vesting Schedule is…	Match and Profit options	Immediate match with flexible profit sharing options with or without vesting	Typically, immediately with flexible options for additional profit sharing

There are other ways to design your plan such as Davis-Bacon or Supplemental Security Income (SSI). Supplemental Security Income (SSI) allows for one profit-sharing amount for wages subject to FICA and one for wages above the FICA limit but below the maximum allowable compensation amounts. We support most any plan design need and can help you determine the right fit for your objectives.

To learn more, visit strategic plan designs or speak to one of our 401(k) consultants at 1-800-943-6108.