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Business Retirement Plans |
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401(k) Plan with Safe Harbor Provisions |
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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 an employer can match up to 3% of eligible pay. |
| Maximum Annual Employee Deferral 2010 | Up to $5,500, catch-up contribution if 50 years of age or older |
| Required Employer Contributions | One of the following |
| Vesting | Vesting schedules available: -Basic match: 100% of participating contributions up to 3% of pay, plus 50% of participant contributions up to the next 2% of pay. -Enhanced Match: 100% of participant contributions, but no less than 4% of pay or more than 6% or different percentage of first percentage of pay & a lesser percentage of other portions of pay -Nonelective contributions 3% of pay for all eligible employees including those who did not contribute |
| Top-Heavy Testing Required | No |
| Who Controls Distributions | Employer through the plan terms |
| Advantage of this type of plan | -No discrimination testing -Employee deferral of current taxes available -More flexibility with contribution amounts due to increase in deferral limit |