Advantage(k) Start
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Start-Up Retirement Plan Options Built Around Your Business Goals
Selecting the right retirement plan can help you attract and retain employees, encourage retirement savings, and support your company’s long-term objectives. Whether you’re looking to maximize employee participation, simplify compliance requirements, or maintain flexibility over employer contributions, Advantage(k) Start has a plan design to fit your needs. Compare three of the most common retirement plan options: Safe Harbor Match, Safe Harbor Non-Elective, and Traditional, to understand how each approach impacts employer contributions, employee benefits, annual testing requirements, and overall plan effectiveness.
SAFE HARBOR MATCH PLAN
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Reward Employees Who Save
Your company matches a portion of employee contributions while satisfying annual nondiscrimination testing requirements. A popular option for businesses looking to encourage employee participation and retirement readiness.
- Encourages employees to participate by matching their contributions
- Eliminates most annual nondiscrimination testing concerns
- Aligns employer contributions with employee engagement and savings behavior
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Advantage(k) Key Plan Provisions (Safe Harbor Match)
Eligibility - Service requirement: 1 Year of Service (1,000 hours worked in a 12-month computation period, which is the anniversary year and then switches to the plan year)
- Age requirement: 21
- Entry dates: Quarterly
Compensation - W-2 Compensation
- Exclude fringe benefits
- Include post-severance compensation
Excluded Classes - Union employees
- Leased employees
- Non-resident aliens
Employee Deferrals - Pre-tax contributions
- Roth contributions
- Allow catch-up contributions
*Due to the inclusion of both Roth and Catch-Up provisions in your plan, special instructions will be included in your DocuSign reflecting our recommendation to use a Deemed Election for Highly Paid Individuals.
Safe Harbor Contributions - Safe Harbor Match: 100% of deferrals up to the first 3% of compensation, then 50% of deferrals for the next 2% of compensation
- Compensation prior to participation is excluded
- Determination period: Plan Year (true-up required if deposited more frequently)
Automatic Enrollment - Initial percentage: 10%
- Permissible withdrawals are allowed in the first 90 days after the first automatic deferral
Discretionary Matching Contribution - Determination period: Plan Year (true-up required if deposited more frequently)
- Compensation prior to participation is excluded
- Allocation requirements: None
Discretionary Profit Sharing Contribution - Method: New Comp (Cross Tested)
- Compensation prior to participation is excluded
- Allocation requirements: Employed on the last day of the applicable plan year and work 1,000+ hours in the applicable plan year
Vesting - Safe Harbor Match: Immediate
- Discretionary Employer Match: 6-year graded
- Discretionary Employer Profit Sharing: 6-year graded
- Exclusions: Service prior to age 18
In-Service Withdrawals Available - From rollover source at any time
- Hardship withdrawals
- Age 59.5 in-service withdrawals from all sources with no limitations
- Loans permitted
SAFE HARBOR NON-ELECTIVE PLAN
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Contribute For All Eligible Employees
Your company makes a required contribution for eligible employees, regardless of whether they choose to save in the plan. This option simplifies testing requirements and helps provide a consistent retirement benefit.
- Provides a retirement benefit to every eligible employee, regardless of participation
- Simplifies annual compliance testing requirements
- Creates a predictable employer contribution strategy each year
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Advantage(k) Key Plan Provisions (SHNE)
Eligibility - Service requirement: 1 Year of Service (1,000 hours worked in a 12-month computation period, which is the anniversary year then switches to the plan year)
- Age requirement: 21
- Entry dates: Quarterly
Compensation - W-2 Compensation
- Exclude fringe
- Include post-severance
Excluded Classes - Union employees
- Leased employees
- Non-resident aliens
Employee Deferrals - Pre-tax
- Roth
- Allow Catch-up
*Due to the inclusion of both Roth and Catch-up Provisions in your Plan, special instructions will be included in your DocuSign reflecting our recommendation to use a Deemed Election for Highly Paid Individuals.
Safe Harbor Contributions - Safe Harbor Non-Elective: 3% of compensation (full year compensation for all eligible employees)
- Compensation prior to participation is excluded
Automatic Enrollment - Initial percentage: 10%
- Permissible withdrawals are allowed in the first 90 days after the first automatic deferral
Discretionary Matching Contribution - Determination period: Plan Year (true up required if deposited more frequently)
- Compensation prior to participation is excluded
- Allocation requirements: None
Discretionary Profit Sharing Contribution - Method: New Comp (Cross Tested)
- Compensation prior to participation is excluded
- Allocation requirements: Employed on the last day of the applicable plan year AND work 1,000+ hours in the applicable plan year
Vesting - Safe Harbor Non-Elective: Immediate
- Discretionary Employer Match: 6-year graded
- Discretionary Employer Profit Sharing: 6-year graded
- Exclusions: service prior to age 18
In-Service Withdrawals Available - From rollover source at any time
- Hardship withdrawals from all sources with no limitations
- Age 59.5 in-service withdrawals from all sources with no limitations
- Loans permitted
Traditional Plan
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Maximum Flexibility and Control
Customize employer contributions to fit your business goals while maintaining flexibility from year to year. This option may require annual nondiscrimination testing but offers the greatest design flexibility.
- Decide each year whether and how much your business contributes
- Customize plan design to support your company’s goals and budget
- Offers the greatest flexibility for employers willing to complete annual testing
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Advantage(k) Key Plan Provisions (Traditional)
Eligibility - Service requirement: 1 Year of Service (1,000 hours worked in a 12-month computation period, which is the anniversary year then switches to the plan year)
- Age requirement: 21
- Entry dates: Quarterly
Compensation - W-2 Compensation
- Exclude fringe
- Include post-severance
Excluded Classes - Union employees
- Leased employees
- Non-resident aliens
Employee Deferrals - Pre-tax
- Roth
- Allow Catch-up
*Due to the inclusion of both Roth and Catch-up Provisions in your Plan, special instructions will be included in your DocuSign reflecting our recommendation to use a Deemed Election for Highly Paid Individuals.
Automatic Enrollment - Initial percentage: 10%
- Permissible withdrawals are allowed in the first 90 days after the first automatic deferral
Discretionary Matching Contribution - Determination period: Plan Year (true up required if deposited more frequently)
- Compensation prior to participation is excluded
- Allocation requirements: None
Discretionary Profit Sharing Contribution - Method: New Comp (Cross Tested)
- Compensation prior to participation is excluded
- Allocation requirements: Employed on the last day of the applicable plan year AND work 1,000+ hours in the applicable plan year
Vesting - Discretionary Employer Match: 6-year graded
- Discretionary Employer Profit Sharing: 6-year graded
- Exclusions: service prior to age 18
In-Service Withdrawals Available - From rollover source at any time
- Hardship withdrawals from all sources with no limitations
- Age 59.5 in-service withdrawals from all sources with no limitations
- Loans permitted
Advantage(k) Plan Comparison at a Glance
| Feature | SH Match | SH Non-Elective | Traditional |
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| Safe Harbor Contribution | 100% of first 3%, plus 50% of next 2% | 3% Non-Elective Contribution | None |
| Immediate Vesting | Safe Harbor Match | Safe Harbor Non-Elective | None |
| Safe Harbor Section Included | Yes | Yes | No |
| Employer Contribution Requirement | Employees must contribute to receive the full employer match. | Employer contributes for all eligible employees, regardless of participation. | Employer contributions are optional and discretionary. |
| Compliance Testing Relief | Yes | Yes | No |
| Best For | Employers who want to encourage employee participation through matching contributions. | Employers who want to provide contributions to all eligible employees and simplify testing. | Employers looking for maximum contribution flexibility and control. |
Advantage(k) FAQ's
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What is Advantage(k)?
Advantage(k) is a streamlined 401(k) solution designed to help businesses establish a retirement plan quickly and confidently. It offers three plan design options so employers can choose the approach that best fits their goals, workforce, and budget.
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Which Advantage(k) option is right for my business?
The right choice depends on your goals. Businesses that want to encourage employee savings may prefer the Safe Harbor Match option, those seeking a predictable employer contribution strategy may choose the Safe Harbor Non-Elective option, and employers wanting maximum flexibility may prefer the Traditional option.
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How long does it take to establish an Advantage(k) plan?
Most of the information needed can be provided through a simple online process. Once complete, TRA guides you through document execution and onboarding so your plan can be established efficiently.
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Do employees have to participate in the plan?
No. Employee participation is voluntary. However, the plan includes automatic enrollment features designed to help employees begin saving for retirement sooner unless they choose a different contribution rate or opt out, as permitted by the plan.
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Can I make employer contributions to the plan?
Yes. Depending on the Advantage(k) option selected, employer contributions may be made through a Safe Harbor Match, Safe Harbor Non-Elective contribution, discretionary matching contribution, or discretionary profit-sharing contribution.
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Is Advantage(k) only for new retirement plans?
Advantage(k) is designed specifically for businesses establishing a new 401(k) plan. Businesses that already sponsor another qualified defined contribution plan may need a different solution.
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What support will I receive after the plan is established?
TRA’s retirement plan professionals support you through onboarding, plan setup, and ongoing administration, helping you navigate plan operations and compliance requirements while providing a simpler experience for you and your employees.
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