Qualified Plans

Our goal at BPI is to help YOU market small business retirement plans and to keep the process SIMPLE for you and your client! This is the time to be in the pension market. New tax laws contain many provisions to encourage the purchase of pension and profit sharing plans. Let us help you make the most of the renewed interest in small business pension plans!
Advanced Concepts – Qualified Plans 412(e)(3)
Qualified Plan Marketing Materials
Enhanced Confidential Census

Plan Comparison Chart

Plan Type 401(k) Safe Harbor
401(k)
Simple
401(k)
Simple IRA Profit
Sharing
SEP IRA Money Purchase Defined Benefit 412(e)(3)
Target Market 1 + Employee 1 + Employee No more than 100 employees that earned more than $5000 in prior year No more than 100 employees that earned more than $5000 in prior year Business with fluctuating earnings and self-employed Small businesses and self-employed Business with high stable earnings and self employed Business with stable earnings and owners close to retirement and self-employed Business with stable earnings and owners close to retirement and self-employed
Key Features Tax-Deferred investing; flexibility in plan design; investment flexibility Tax-Deferred investing; no discrimination testing; investment flexibility Tax-Deferred investing; no discrimination testing; investment flexibility Tax-Deferred investing; no discrimination testing; investment flexibility Flexible Contributions; investment flexibility Investment flexibility Consistent contributions; investment flexibility Consistent contributions Maximum consistent contributions
Contributors Employee and optional Employer Employee and Employer Employee and Employer Employee and Employer Employer Only Employer Only Employer Only Employer Only Employer Only
Contribution
Flexibility
Yes No; Possible additional employer contributions above safe harbor No Very Limited Yes Yes No; Percentage established at plan set up No; Based on formula No; Based on formula
Max Eligibility
Requirements
Age 21 and 1 year of service Age 21 and 1 year of service Age 21 and 1 year of service Employees earning $5000 in current year and any 2 prior years Age 21 and 1 year of service (2 Years with 100% vesting) Age 21 with any service in 3 of last 5 years Age 21 and 1 year of service (2 Years with 100% vesting) Age 21 and 1 year of service (2 Years with 100% vesting) Age 21 and 1 year of service (2 Years with 100% vesting)
Max Annual
Salary Deferral
$16,500 w/$5500 catch up contributions $16,500 w/$5500 catch up contributions $11,500 w/$2500 catch up contributions $11,500 w/$2500 catch up contributions Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable
Max Annual
Employer
Contribution
25% of eligible employee compensation 3-4% safe harbor; option additional contribution either matching or non-elective (total 2.5% of eligible compensation) 100% up to 3% match to participants or 2% to all eligible employees 100% up to 3% match to participants or 2% to all eligible employees Up to 25% of eligible employee compensation; limited to $49000 per eligible employee (2011) 25% of eligible employee compensation Up to 25% of eligible employee compensation; limited to $49000 per eligible employee (2011) Amount needed to fund plan Amount needed to fund plan
Vesting in
Employer
Contribution
May be graded up to 6 years or 100% after 3 years 100% immediately 100% immediately 100% immediately May be graded up to 6 years or 100% after 3 years 100% immediately May be graded up to 6 years or 100% after 3 years May be graded up to 6 years May be graded up to 6 years
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