| Features |
401(k) Safe Harbor Plan |
Traditional 401(k) Plan |
| Funding Vehicle |
Group Annuity Contract and Trust |
Group Annuity Contract and Trust |
| Maximum Eligibility |
- Age 21
- 0, 3, 6, 9 months or 1 year of 1000 hours with the company
|
- Age 21
- 0, 3, 6, 9 months or 1 year of 1000 hours with the company
|
| Excludable Employees |
- Non-resident aliens
- Employees who collectively bargain for benefits
|
- Nonresident aliens
- Employees who collectively bargain for benefits
|
| Maximum Salary Deferral |
Lesser of $15,500 or 415 Limits (indexed annually) |
|
| Required Employer Contribution |
- Match 100% of first 3% of pay deferred, plus 50% of the next 2% of pay deferred
- 100% of 4% of pay
- 100% of 5% of pay
- 100% of 6% of pay
|
- 25% up to 4%
- 25% up to 6%
- 50% up to 4%
- 50% up to 6%
- 100% up to 4%
- 100% up to 6%
|
| Discretionary Profit Sharing Contribution |
Allowed |
Allowed |
| Actual Deferral Percentage (ADP) and Actual Contribution Percentage (ACP) Tests |
Not Required |
Required |
| Top Heavy Testing |
Required |
Required |
| Vesting |
Required employer contributions are 100% vested at all times. Discretionary Profit Sharing Contributions may be subject to a 6 year graded vesting schedule |
All employer contributions may be subject to a 6 year graded vesting schedule |
| Loans |
Allowed |
Allowed |
| Withdrawal Provisions |
Allowed only in the following situations:
- Separation from service
- Retirement
- Death
- Disability
- Plan Termination
- Sale of assets or subsidiary
|
Allowed only in the following situations:
- Separation from service
- Retirement
- Death
- Disability
- Plan Termination
- Sale of assets or subsidiary
|
| Maximum No. of Employees |
Less than 100 |
Less than 100 |
| Reporting and Disclosure Requirements |
Full ERISA requirements |
Full ERISA requirements |
| Fiduciary Liability |
Full fiduciary responsibility ERISA 401(c) relief is available |
Full fiduciary responsibility ERISA 401(c) relief is available |
| Restatement Allowed From Existing Qualified Plan |
Yes, first year must be 12 months in length OR at least 3 months in length for a new plan (other than a successor plan). Cash or deferred arrangement and 401(k) Safe Harbor provisions can be added to an existing profit sharing plan at least 3 months prior to the end of the plan year. |
Yes |
| Employee Notice Requirement |
Must be given at least 30 days and no more than 90 days in advance. The notice must contain specified IRS wording and can cross-reference a Summary Plan Description. |
Not required. |
| Plan Years |
Can be any plan year, however must be 12 months in length, unless first plan year which must be 3 months in length |
Any 12 month period is allowed |
| Plan Signing Deadlines |
In general, plan wording changes to reflect 401(k) Safe Harbor provisions must be adopted prior to the beginning of the plan year in which they will take effect |
Plan must be signed by the end of the plan year which the changes take effect |
| Pay |
Plan may use pay for the payroll period. |
Plan typically uses pay while an active employee |
