401(K) Plan Design:
CREATING THE RIGHT PLAN FOR YOU
As your business grows, your needs change. Your retirement plan is no different. At TRA, we help you at all stages of your business growth to make sure your retirement plan keeps pace with your needs, now and into the future.
The Advantages of Choosing the Right Retirement Plan
Choosing the right plan is critical. There are many different types of retirement plans, with various legal requirements and regulations. Our team works closely with you to determine which type best suits both your immediate and long-term goals — it’s not “one size fits all.” We will design a retirement plan with your unique needs in mind and will help you understand the choices, define the particulars and design a package that appeals to your employees and your bottom line.
Plan Design & Administration
Our success is based on your retirement plan’s performance. We develop TPA solutions that maximize your benefit as a business owner — at an affordable cost. Our team is with you each step of the way to make sure that regulations are met and that your plan works for you and your employees at each stage of your business growth. At TRA, we believe in creating long-term relationships with our clients, contributing to our combined success. We are responsible, proven plan administrators that can help make a complex process much easier for you. We also offer 3(16) administration to help prudently manage the plan and relieve you, the employer, of daily fiduciary responsibilities.
TRA RETIREMENT PLAN DESIGNS ADMINISTERED
Defined Contribution Plans
A defined contribution plan consists of contributions made by the employer, employee or both to the employee’s individual account. The contributions are generally invested on behalf of the employee. At retirement, the employee will receive the balance in his or her account, which is based on contributions and investment gains or losses.
A Start-Up 401(k) plan is a type of retirement savings plan designed specifically for small businesses or start-ups. It allows employers to offer their employees a way to save for retirement while also providing tax benefits for both the employer and the employee.
Safe Harbor 401(k)
A Safe Harbor 401(k) is ideal for employers who wish to eliminate the burden of the discrimination testing associated with the Traditional 401(k).
A retirement plan for companies with 100 employees or fewer. SIMPLE 401(k) plans are similar to Traditional 401(k) plans but require less administration and fewer fees for the employer.
A Solo 401(k) is a retirement savings plan specifically designed for self-employed business owners and their spouses, with no other eligible employees.
A Traditional 401(k) allows employees to contribute a portion of their compensation, before income taxes, to a company-sponsored retirement plan. There are several types, including SIMPLE 401(k), Safe Harbor 401(k), Solo 401(k), Roth 401(k), and Traditional 401(k).
A Cross-Tested plan is a retirement plan (usually a profit-sharing plan) that has different contribution percentages for different groups of employees.
A Money Purchase plan is similar to a profit-sharing plan, except that it requires fixed annual contributions; employer must contribute the required amount on time or pay penalties.
A Profit Sharing plan is a plan that gives employees a percentage of company profits based on each year’s company earnings.
A 457(b) plan is a plan offered to state and local government employees, including police officers, firefighters, city or county workers, water authority employees or other civil servants.
A 403(b) plan is a plan for tax-exempt organizations, most employees of public schools and self-employed religious ministers.
Defined Benefit Plans
A defined benefit plan promises a specific monthly benefit at retirement — either an exact dollar amount or an amount calculated from a formula based on certain factors, like salary and years of service. The basic structure provides employers with flexible plan design solutions to meet the employee and employer expectations. A multiple employer plan has one named entity, formally titled “plan sponsor”, responsible for adhering to the regulatory requirements and filings associated with offering a retirement plan. Learn More
A Cash Balance Retirement plan defines the promised retirement benefit as a stated account balance and does not hinge on the value of its investments. The employer solely assumes the investment risks and rewards on plan assets.
Frozen Defined Benefit
Also known as a preserved pension, a Frozen Defined Benefit plan is a workplace pension into which the employee may no longer make contributions.
Solo Defined Benefit
A Solo Defined Benefit plan is sometimes ideal for sole proprietors with high earned income. The employer makes 100 percent of the contributions, which are generally 100 percent tax-deductible.
Group 401(k) Plans
Group 401(k) Plans share a common bond: they enable businesses to join together to provide retirement plans to their employees with fewer administrative burdens and lessened fiduciary risks — and at lower costs — than offering their own single-employer plans.
Interest is growing in Group 401(k) Plans. From a regulatory standpoint, the ongoing emphasis is on increasing opportunities for more people to save for retirement. And, at the same time, employers want to provide the benefits that will help them attract and retain talented team members, without losing focus on their bottom line.
As an experienced Third-Party Administrator (TPA) for Group 401(k) Plans, TRA can assist you whether you are considering adding these plans to your business or if you wish to further enhance your ability to offer Group 401(k) Plans to your clients.
Download The Advisors Guide to Group 401(k) Plans:
MEPs, PEPs and Aggregation Programs
Multiple Employer Plans (MEP)
A Multiple Employer Plan (MEP) is a retirement plan structure available to more than one employer, who are also members of bona-fide group or association. These employers typically benefit from economies of scale and reduced fiduciary liability. The basic structure provides employers with flexible plan design solutions to meet the employee and employer expectations. A multiple employer plan has one named entity, formally titled “plan sponsor”, responsible for adhering to the regulatory requirements and filings associated with offering a retirement plan.
Pooled Employer Plans (PEP)
Pooled Employer Plans (PEP) allows employers of any size to pool assets into a 401(k) plan professionally administered by TRA. The benefits? Simplified administration and enrollment, reduced liability, and the potential for savings.
Multiple Employer Aggregation Programs (MEAP)
Multiple Employer Aggregation Programs (MEAP) is a group 401(k) program designed and made available for an organizations’ members or clients.
The MEAP is designed to gather each plan’s important administrative, recordkeeping and fiduciary services to be overseen by a third party, typically a 3(16) administrative and 3(38) investment fiduciary.
Our Plan Design & Administrative Services
- Plan design and consulting
- Flexible plan design options
- Summary plan descriptions
- Prototype & custom plan documents
- Full conversion & implementation services
- Core compliance services
- Signature-ready form 5500
- Discrimination testing: ADP/ACP
- IRC 415c limitations (100% or contribution limits)
- Monitoring of elective deferrals (402(g))
- Top-heavy testing (416(c))
- Integrated payroll services
- Online administrative resources