Overview
Plan Design
We recognize that every employer’s objectives and financial capabilities are different. We offer customized plan design services to meet the needs of each employer. Whether the goal is maximizing benefits for owners and key employees or employee recruitment and retention, our plan architects can build a plan to meet your needs.
The Workplace Retirement Plan Resource
This popular resource for financial professionals and employers concisely dives into popular plan designs, providing sample illustrations. It also summarizes key provisions of the SECURE 2.0 Act, including automatic enrollment and the new plan tax credits.
Solo 401(k) Plan
A Solo 401(k) is for businesses with only owners and spouses as employees (no other staff). Compared to a SIMPLE IRA or SEP IRA, it typically lets small business owners save more for retirement and increase their tax savings. Learn more.
Traditional 401(k) Plan
Sole proprietors, corporations, partnerships, and most non-profits can adopt a traditional 401(k) plan. It lets employees set aside a portion of their paycheck for retirement, with contributions made before (Pre-Tax) or after taxes (Roth). Employers can also match contributions, with conditions based on service and vesting requirements. Traditional 401(k) plans are subject to nondiscrimination testing, which may limit contributions for business owners and other Highly Compensated Employees. A Safe Harbor 401(k) plan helps avoid these limits. Learn more.
Safe Harbor 401(k) Plan
Safe Harbor provisions allows 401(k) plan sponsors to avoid the Actual Deferral Percentage (ADP) test and the Actual Contribution Percentage (ACP) test for employer contributions. These nondiscrimination tests are deemed satisfied if the employer agrees to make specific contributions for plan participants. In other words, Safe Harbor adoption will allow 401(k) participants, including owners and other Highly Compensated Employees, to contribute up to the maximum IRS limit without fear of nondiscrimination test failure and corrective refunds. Learn more.
Super Safe Harbor 401(k) Plan
InWest’s Super Safe Harbor 401(k) Plan combines a Safe Harbor 401(k) with a New Comparability Profit Sharing Plan. This design lets the sponsor contribute more to specific employees, such as the business owner or a selected group of key employees. Learn more.
Group of Plans (GOP)
A GoP is a new type of plan established by the SECURE Act. Employers (whether unrelated, related, or part of the same controlled group) can file a single Form 5500 for multiple defined contribution plans. While plans that are part of the GoP retain plan design flexibility, the GoP allows them to use their collective purchasing power to obtain lower fees and reduce their administrative and fiduciary burden. To be considered a GoP, the plans must have the same trustee, administrator, fiduciaries, investments, and plan year. A GoP can be an excellent choice for employers with fewer than 100 plan participants.
Pooled Employer Plans (PEP)
Introduced under the SECURE Act, PEPs allow unrelated employers that meet specific requirements (such as having the same “pooled plan provider”) to band together to participate in a single retirement plan. While employers who are part of the PEP retain plan design flexibility, the PEP allows them to use their collective purchasing power to obtain lower fees and reduce their administrative and fiduciary burden. For example, plans that require an annual ERISA audit (100+ participants) can share that cost among multiple employers within the PEP. A PEP can be an excellent fit for employers with over 100 plan participants.
Multiple Employer Plans (MEP)
MEPs typically fall into two primary formats: First, there are MEPs where the participating employers are under common control, such as a group of employers, some of which are owned in whole and others in part by the same parent organization. Second, there are MEPs maintained by independent employers in the same trade, industry group, or association. Examples include Professional Employer Organizations (PEOs) and trade associations.
Traditional Profit Sharing Plan
A Traditional Profit Sharing Plan is a qualified retirement plan, established and funded entirely by employer contributions. The overall contribution level may vary from year to year. The contribution must generally be allocated to each participant’s account in a uniform fashion with each participant receiving the same percentage of compensation. Because of this uniform allocation requirement, many plan sponsors opt for a New Comparability Profit Sharing Plan design that affords some flexibility in determining how much each employee will receive of the profit sharing contribution. Learn more.
New Comparability Profit Sharing Plan
A New Comparability Profit Sharing Plan is generally a profit sharing plan in which the contribution percentage formula for one category of participants is greater than the contribution percentage formula for other categories of participants. Unlike a Traditional Profit Sharing Plan, a New Comparability Plan allows employers some flexibility in determining what percentage of pay each participant will receive of the profit sharing contribution. Employers often use this flexibility to target a certain employee (business owner) or group of employees for higher plan contributions. Learn more.
New Comparability Cash Balance Plan
A Cash Balance Plan is a type of Defined Benefit Plan. It is not an Individual Account Plan (Defined Contribution Plan) since each participant’s benefits are not determined by the performance of the assets held in an individual account for that participant. However, it looks a lot like an Individual Account Plan (such as a Profit Sharing Plan) because the benefits are related to a Hypothetical Cash Balance Account. Because a Cash Balance Plan exhibits some characteristics of both Defined Benefit Plans and Defined Contribution Plans, it is often called a hybrid plan.
A New Comparability Cash Balance Plan uniquely targets specified participants such as business owners or other key employees for specified allocation amounts. This formula structure is the same as for New Comparability Profit Sharing Plans. The difference is that the Cash Balance Plan is, in fact, a Defined Benefit Plan and can permit much larger benefit levels than is possible under the $70,000 Profit Sharing Plan limit. Learn more.
DCDB Combo Plan
A Defined Contribution/Defined Benefit Combination Plan or DCDB Combo Plan
allows the plan sponsor to offer a two-tiered approach to saving for retirement. In a DCDB
Combo Plan design, a retirement benefit level is established in the cash balance plan
based on age, service, and/or compensation. This benefit is then coordinated or offset
with an employer contribution into a the defined contribution plan, typically a 401(k)/profit sharing plan.
This plan design can produce dramatic tax savings for the employer and allow the
business owner and/or key employees to receive significant retirement benefits. It also
offers affordable staff funding costs for even large employers. InWest offers turnkey plan design and compliance administration for DCDB Combo Plans. Learn more.
Solo DB Plan
A Solo Defined Benefit Plan is for businesses with only owners and spouses as employees (no other staff). It is often paired with a Solo 401(k) plan to form a Solo DB(k). A Solo DB(k) provides an excellent opportunity for business owners to save on taxes and accumulate a significant tax-preferred retirement account. Learn more.
Traditional Defined Benefit Plan
A traditional Defined Benefit Plan (DB Plan or DBP) is a retirement plan that provides a benefit for individual participants based on formulas in the Plan Document, such as 50% of pay paid monthly starting at age 65. Learn more.
403(b) Plan
A Section 403(b) plan is a deferred compensation retirement program that is offered to employees of a tax-exempt organization under IRC Section 501(c)(3) or employees of certain educational organizations. A 403(b) plan is similar to a 401(k) plan in many respects; however, a 403(b) plan is subject to reduced nondiscrimination testing. InWest has an ASPPA Tax-Exempt & Governmental Plan Consultant on staff and offers turnkey plan design and compliance administration for 403(b) retirement plans. We also provide substantial fee discounts for non-profit employers.
457 Plan
A Section 457 plan is a “nonqualified” deferred compensation retirement program that a State, a political subdivision of a State, an agency or instrumentality of a State, or a tax-exempt organization maintains. InWest has an ASPPA Tax-Exempt & Governmental Plan Consultant on staff and offers turnkey plan design and compliance administration for 457 retirement plans.