401K Plans
  • Individual account plan
  • 401k is a variation of a profit sharing plan in which a participant elects to defer a portion of his compensation. The portion deferred into the plan is not currently subject to federal income tax.
  • A participant may elect to defer 100% of compensation up to a maximum amount determined annually by the IRS - $16,500 in 2010.
  • Participants age 50 and over can make a $5,500 "catch-up" contribution.
  • Employee deferrals are 100% vested at all times.
  • The employer may also make a separate "matching" contribution. This contribution is a percentage of the employee’s deferral.
  • Cash or deferred arrangements are subject to a special non-discrimination test, which compares the amount of contributions made to the plan on behalf of the highly compensated employees versus the non-highly compensated employees.

Immediate Tax Savings with 401(K) on every paycheck
401k savings are deducted before income taxes...

No Plan

401 (K) Plan

Earnings

$1,666

$1,666

To 401(k) (pre-tax)

$0

$100

Taxes

$273

$245

FICA

$119

$119

Savings (After-Tax)

$100

$0

IN YOUR POCKET

$1,174

$1,202



TAX SAVINGS EACH PAYCHECK

$28

TAX SAVINGS PER YEAR

(26 Pay Periods/Year)

$728



Investment yields

               $100 per month investment

(Assumes interest between 8% and 11.5%)
-News Flash
7 Day Deposit Requirement for 401(k) Deferrals
1/26/2010  -  The DOL announced the publication of a final rule to protect employee contributions deposited to small plans (under 100 participants). Effective 1/14/2010 the safe harbor period of 7 business days after withholding to deposit employee deferrals to the plan would be deemed to be in compliance. For Employers that have been using the 15 day rule, we would advise that you make the necessary changes immediately to fall within the 7 days period.
2010 Limits - NO CHANGES!
11/2/2006  -  New 2010 Limits have been released! They remain the same! See Policies for the most up-to-date information! Link to Policies
DOL issues USERRA Notice Final Regulations January 18, 2006
1/19/2006  -  The DOL has issued final regulations on the USERRA Notice. Did you know that Employers MUST provide notice?Link to the DOL to download the newest poster text in order to be in technical compliance with the final regulations.
Bond Coverage
11/17/2005  -  Did you know your plan must be covered by a Fidelity Bond in the amount of 10% of the plan assets? Contact us for more information!
Loan Interest
11/17/2005  -  Loan Interest Rate for March 2010 is 3.23%
Deduct OTC Medicines
9/27/2005  -  Did you know that Over the Counter (OTC) medicines can be deducted in your Flex plan? Link to Cafeteria

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