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Business Retirement Plans |
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401(k) Plan |
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| Employer Characteristics | All taxable business & tax-exempt organizations |
| Who Must Be Covered | Any employee with more than 1,000 hours of service within one year & who is age 21 or older; can exclude certain employees. |
| Maximum Allocation (2010) | Maximum eligible pay per employee is $16,500 plus employer can match up to 3% of eligible pay. |
| Maximum Annual Employee Deferral (2009) | Up to $5,500, catch-up contribution if 50 years of age or older |
| Required Employer Contributions | Discretionary, unless plan is top-heavy (A plan is top-heavy if on the determination date, the total value of the accounts of all key employees is greater than 60% of the total value of the accounts of all employees). |
| Vesting | Vesting schedules available |
| Top-Heavy Testing Required | Yes |
| Who Controls Distributions | Employer through the plan terms |
| Advantage of this type of plan | Employee deferral of current taxes
available Flexible contributions More flexibility with contribution amounts due to increase in deferral limit |