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2017 Plans


Below are the plans available for 2017.

401 (K)

- Qualified
  • A form of profit sharing plan that allows employee salary deferrals.
  • Eligibility - Plans can be designed to require up to one year of service and attainment of age 21.
  • Employer contributions are discretionary unless a safe harbor election is made.
  • Safe Harbor - A safe harbor plan will automatically pass the 401(k) testing. This allows the highly compensated employees to defer the maximum contribution. The employer commits to either a matching or profit sharing type contribution.
  • Maximum Salary Deferral limit - $18,000 plus $6,000 catch-up for individuals age 50 or older in 2017.
  • Maximum Contributions - 100% of compensation up to $54,000 (includes salary deferral, matching, profit sharing and forfeitures) in 2017.
  • Maximum Deduction - 25% of eligible compensation plus the salary deferral contributions.
  • Compensation limit - $270,000 in 2017.
  • Vesting - Salary deferral and safe harbor contributions are always 100% vested. Most employer contributions are subject to a vesting schedule.

403 (B)

- Qualified
  • This type of plan is available only for certain tax exempt or educational organization employers.
  • Though similar to a 401(k) plan, there are less reporting and testing requirements.
  • Eligibility - Eligibility requirements only apply to employer contributions. Plans can be designed to require up to one year of service and attainment of age 21.
  • Employer contributions are discretionary.
  • Vesting - Salary deferral contributions are always 100% vested. Employer contributions can be subject to a vesting schedule.

Profit Sharing

- Qualified
  • Eligibility - Plans can be designed to require up to one year of service and attainment of age 21. A two-year wait can be used, but will require 100% vesting.
  • Employer contributions are discretionary.
  • Maximum Contributions - 100% of compensation up to $54,000 for each individual in 2017.
  • Maximum Deduction - 25% of compensation.
  • Compensation limit - $270,000 in 2017.
  • Vesting - The contributions are subject to a vesting schedule.

Money Purchase Pension

- Qualified
  • Eligibility - Plans can be designed to require up to one year of service and attainment of age 21. A two-year wait can be used, but will require 100% vesting.
  • Employer contributions are mandatory and are defined up to 25% of compensation.
  • Compensation limit - $270,000 in 2017.
  • Vesting - The contributions are subject to a vesting schedule.

Defined Benefit Pension

- Qualified
  • Eligibility - Plans can be designed to require up to one year of service and attainment of age 21. A two-year wait can be used, but will require 100% vesting.
  • Employer contributions are determined by an actuary based upon the compensation and age of the participant. Contributions are higher for older individuals.
  • Benefits accrue each year based upon the plan benefit formula.
  • Vesting - The benefits are subject to a vesting schedule.

Cash Balance Plan

- Qualified
  • A Cash Balance Plan is a form of defined benefit plan that is simpler for the employer and participant to understand the value of the benefits being offered.
  • This plan type has the same funding and actuarial characteristics of a regular defined benefit plan.

SEP (Simplified Employee Plan)

- IRA
  • Contributions are made to an IRA for the employee.
  • Eligibility - All employees are eligible who have attained age 21 and completed service with the employer in three of the last five years.
  • Maximum Contribution - 25% of compensation up to $54,000 in 2017.
  • Compensation limit - $270,000 in 2017.
  • Participants are always 100% vested.
  • Salary deferral SEP. This type of plan is no longer available.

Simple IRA

- IRA
  • For employers with 100 or less employees.
  • Contributions are made to an IRA for the employee.
  • Eligibility - Employees who have received compensation and are anticipated to receive compensation of $6,000 or more.
  • Maximum Salary Deferral limit - $12,500 and $3,000 catch-up for individuals age 50 or older in 2017.
  • Mandatory Employer Contributions - The employer must agree to make either a matching contribution or a nonelective contribution. * Participants are always 100% vested.