|
|
| Features/Options | Simple 401(k) Plan | Safe Harbor 401(k) | Automatic Enrollment 401(k) | 401(k) |
|---|---|---|---|---|
| Key Advantage | Salary reduction plan with little administrative paperwork and no testing requirements. | Permits employee to contribute more than in other options without annual discrimination testing | Provides high level of participation and permits high level of salary deferrals by employees. Also safe harbor relief for default investments. | Permits employee to contribute more than in other options. |
| Employers Who Can Provide This Option | Any business with 100 or fewer employees that does not currently maintain any other retirement plan for employees eligible for this plan. | Any business with one or more employees | Any business with one or more employees | Any business with one or more employees |
| Funding Responsibility | Employee salary reduction contributions and/or employer contributions | Employee salary reduction contributions and employer contributions | Employee salary reduction contributions and employer contributions | Employee salary reduction contributions and/or employer contributions |
| Maximum Annual Contributions Per Participant | Employee: Up to $11,500 in 2010 and 2011. Additional contributions can be made by participants age 50 or over. Employer: For matching contributions, must match $ for $ up to 3% of compensation. For non-elective contributions, must contribute 2% of each eligible employee's compensation up to $4,500. |
Employee: Up to $16,500 in 2010 and 2011. Additional contributions can be made by participants age 50 or over. Employer/Employee Combined: Contributions per participant up to the lesser of 100% of compensation or $49,000 in 2010 and 2011. Employer can deduct amounts that do not exceed 25% of aggregate compensation for all participants. |
Employee: Up to $16,500 in 2010 and 2011. Additional contributions can be made by participants age 50 or over. Employer/Employee Combined: Contributions per participant up to the lesser of 100% of compensation or $49,000 in 2010 and 2011. Employer can deduct amounts that do not exceed 25% of aggregate compensation for all participants. |
Employee: Up to $16,500 in 2010 and 2011. Additional contributions can be made by participants age 50 or over. Employer/Employee Combined: Contributions per participant up to the lesser of 100% of compensation or $49,000 in 2010 and 2011. Employer can deduct amounts that do not exceed 25% of aggregate compensation for all participants. |
| Minimum Employee Coverage Requirements | Generally, must be offered to all employees at least 21 years of age who worked at least 1,000 hour in previous year. | Generally, must be offered to all employees at least 21 years of age who worked at least 1,000 hour in previous year. | Generally, must include all employees who have not already opted out and those who are at least 21 years of age who worked at least 1,000 hours in previous year. | Generally, must be offered to all employees at least 21 years of age who worked at least 1,000 hour in previous year. |
| Contributor's Options | Employee can decide how much to contribute. Employer must make matching contributions or contribute 2% of each employee's salary up to the set maximum. | Employees can decide how much to contribute pursuant to a salary reduction agreement. The employer must make either specified matching contributions or a 3% contribution to all participants. | Employees, unless they opt otherwise, must make salary reduction contributions specified by the employer. The employer can make additional matching contributions as set by the plan terms. | Employees can decide how much to contribute pursuant to a salary reduction agreement. The employer can make additional contribution, including matching contributions as by the plan terms. |