Retirement plans are not "one-size fits all". There is no single method for selecting the right retirement plan. Each small business and every small business owner is unique and must consider their own goals and priorities.
Four key questions that help to identify the best retirement plan solution are;
Rothrock Payroll Services works with several providers to provide a full array of retirement plan options. From plan selection to discrimination testing to completion of annual Form 5500 returns, Rothrock makes retirement plan administration easier.
One solution that Rothrock has developed is the Multiple Employer 401k Plan.
The professionals at Rothrock are often asked about retirement plan options. Employers want to ensure that their pension costs go to the employees and not to annual administrative costs. In addition to limiting annual administrative costs, employers always want to mitigate their fiduciary liability. To meet these and other recurring desires, Rothrock created the Multiple Employer 401K/Profit Sharing Plan. Here is a quick overview.
Unaffiliated employers join or "adopt" into the plan and this enables the employers to pool their resources so that:
The plan is completely customizable and while it isn't the best answer for every employer, it is a good option for many employers. Some features include:
|The government won't allow you to defer all of your taxes by contributing everything into a retirement plan. There are several dollar and percentage limits and they are always changing. Rothrock helps you navigate this maze of limiting amounts and percentages.|
|Annual compensation for plan purposes (for plan years beginning in calendar year) 401(a)( 17)||Indexed in $5,000 increments||$265,000||$270,000|
|Defined benefit plan, basic limit (for limitation years ending in calendar year) 415(b)||Indexed in $5.000 increments||$210,000||$215,000|
|Defined contribution plan, basic limit (for limitation years ending in calendar year) 415(c)||Indexed in $1,000 increments||$53,000||$54,000|
|401(k)/403(b) elective deferrals (for taxable years beginning in calendar year) 402(g)||Indexed in $500 increments||$18,000||$18,000|
|457 plan, elective deferrals (for taxable years beginning in calendar year)||Indexed in $500 increments||$18,000||$18,000|
|401(k)/403(b)/457, catch-up deferrals (for taxable years beginning in calendar year) (Age 50+) 414(v)||Indexed in $500 increments||$6,000||$6,000|
|SIMPLE plan, elective deferrals (for calendar years) 408(p)||Indexed in $500 increments||$12,500||$12,500|
|SIMPLE plan, catch-up deferrals (for taxable years beginning in calendar yr) (Age 50+) 408(p)||Indexed in $500 increments||$3,000||$3,000|
|Defined contribution plan §415 percentage of compensation contribution limit 415(c)||100% of compensation|
|Profit sharing plan §404 percentage of compensation deduction limit||25% of compensation|
|Elective deferrals||Do not count against §404 deduction limits|
|SEP contribution / deduction limit 408(k)||25% of compensation|
|IRA contribution limit 408(a)||$5,500||$5,500|
|IRA catch-up contribution (Age 50+)||$1,000||$1,000|
|Highly Compensated Employee 414(q)||$120,000||$120,000|
|SEP Coverage 408(p)||$600||$600|
|FICA Covered Compensation||$118,500||$127,200|
|PBGC Maximum Monthly Insured Benefit (Age 65)||$5,011|