The table below summarizes retirement plan contribution limits for 2017 and 2018. Please contact us if you have any questions or would like to schedule an appointment.
- What are the current retirement plan contribution limits?
- Do we need any documentation for employees who chose not to enroll in our 401 (K) plan?
Yes. You should retain a signed enrollment form or other documentation showing that the employee declined to participate. Employers who don’t have signed waivers can be forced to make Contributions for the employee later.
- Why do you need a census with all of our employees each year?
There are reporting requirements, coverage test and other factors which require that we look at a complete employee census. If you have concerns about your census information, please call us.
- What can we use our forfeiture account for?
Your plan document will specify, but you may be able to use forfeitures to pay plan expenses, reduce employer contributions, make funding corrections, and /or reallocate to the other participants in the plan.
- As a plan sponsor, am I required to keep copies of each participant's beneficiary statement?
A third party such as an investment custodian may maintain beneficiary statements for the plan. But ultimately, it is the responsibility of the plan (usually the plan sponsor) to keep a copy of the current election. Much litigation has occurred surrounding the lack of current beneficiary Statements.
- What is a required minimum distribution?
Company owners and retired workers who are over the age of 70 ½ must begin taking distributions from the plan. Other participants (over the age of 70?) who are still working for the plan sponsor Do not need to take these distributions until they actually retire.
- What is a Safe Harbor plan?
A Safe Harbor plan is a plan which attempts to avoid the problems of the ADP and Top-Heavy tests by making a guaranteed contribution to employees. That contribution is either a matching contribution that caps at 4% of wages for employees who are contributing their own funds, or a contribution of 3% of wages for all eligible employees.
- Can we exclude part time employees from the plan?
Generally, any employee who works more than 1,000 hours per year (20 hours per week) must be included in the plan.
- What is an ERISA bond, and how much does it need to be?
Retirement plans are required to carry coverage to protect the plan participants from misappropriation of funds. The bond needs to be in the amount of 10% of plan assets and can generally, be obtained as a rider on your regular liability insurance policy.
- Our company is an LLC. Can the ``partners`` still make 401(k) contributions?
Yes. “Partners or members” in an LLC, a partnership, or in a sole proprietorship may still make 401 (K) contributions, as long as they have earned income.
- What is vesting?
Any money you contribute from your paycheck is always 100% yours. But company matching funds usually vest over time- typical either 20% or 25% a year, or all at once after three years. Once a participant is fully vested, they can take the entire company match with you when you part ways with your job.