Eligibility for plan |
Employers with 100 or fewer employees |
Any business can establish |
Any business can establish |
Eligibility for participation |
Employees earning over $5,000 or more in two prior years and no other plan |
Age 21
Completion of one year of service
1,000 hours service per year |
Age 21
Completion of one year of service
1,000 hours service per year |
IRS Form 5500 required |
No |
Yes |
Yes |
Contribution
Limits – Employer |
Employer must make matching contributions up to 3% of employee compensation or contribution 2% of total eligible compensation |
Employer has discretion on what to contribute up to 25% of eligible compensation
Employer contributions not required |
Employer must make dollar-for-dollar matching contributions up to 3% of employee compensation and $.50 on the dollar for the next 2% of employee compensation or contribute 3% of total eligible employee compensation. Additional discretionary profit-sharing contributions are allowed. Employer contributions may not exceed 25% eligible compensation |
Required Minimum ER Contribution |
|
|
|
Matching option |
Dollar for dollar match up to 3% |
None |
4% of employee compensation |
Non-Elective Contribution |
2% of employees total eligible compensation* |
None |
3% of employees total eligible compensation |
Profit-Sharing available |
No |
Yes, if plan allows |
Yes, if plan allows |
Contribution format |
Can be made as a matching contribution or profit-sharing contribution |
Can be made as a matching contribution and/or profit-sharing contribution |
Can be made as a matching contribution and/or profit-sharing contribution |
$ Limits – Employee |
$12,500 per year for employee if under age 50
$15,500 per year for employee if over age 50 |
$18,000 annually if under age 50, subject to testing
$24,000 per year if over age 50, subject to testing |
$18,000 annually if under age 50
$24,000 per year if over age 50 |
Deadline for Employer contribution |
Employer tax filing deadline, plus extensions |
Employer tax filing deadline, plus extensions |
Employer tax filing deadline, plus extensions |
Retirement assets comingled |
Not allowed |
Plan level decision, but most plans allow for IRA, SIMPLE IRA, 403(b), 457(b) or other 401(k) balances to be comingled |
Plan level decision, but most plans allow for IRA, SIMPLE IRA, 403(b), 457(b) or other 401(k) balances to be comingled |
Vesting |
100% immediate in employer contributions |
Plan may offer a vesting schedule with several options being available |
100% immediate on Safe Harbor contributions, with vesting schedule available on employer contributions above Safe Harbor |
Loans** |
Not available |
Yes, if plan allows for loans |
Yes, if plan allows for loans |
Pre-tax or Roth (after tax) |
Pre-tax only |
Pre-tax or Roth if document allows |
Pre-tax or Roth if document allows |
Distributions*** |
10% premature distribution
10% increased to 25% during first two years
In-service distributions allowed
Must begin distributions by age 70 ½
Available at any time for any reason |
10% premature distribution
In-service distributions available if plan allows
Must begin distributions by age 70 ½ unless still employed, unless over 5% owner
Available for hardships |
10% premature distribution
In-service distributions available if plan allows
Must begin distributions by age 70 ½ unless still employed, unless over 5% owner
Available for hardships |