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Compare Your Options
The chart below is designed to assist you in determining the best retirement plan
for you and your company. All of our retirement plans are designed to help small
business owners save for retirement while reducing taxes. They offer you the opportunity
for both tax-deductible contributions and tax-deferred growth.
For more information on retirement plans for small businesses, please contact
our Retirement Plan Services at 1-800-222-8222 or click
here to learn how to get started.
SMALL PLAN OPTIONS
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SEP |
SIMPLE |
403(b) Salary Deferral Plan |
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Eligible Employers |
| All employers,
including sole proprietors, partnerships, and corporations. |
Employers with
100 or fewer employees with $5,000 or more in compensation for the preceding
year. |
Public Educational
Organizations and any tax-exempt organization described in Section 501(c)(3)
of the Internal Revenue Code. (Most hospitals, churches, educational institutions,
and certain nonprofit organizations are included.) |
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Contribution Limits |
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Employer: 0-25% of compensation up to $50,000 for each eligible employee in 2012. |
Employee: 100% of compensation up to $11,500 in 2012.
Employer: Additional $11,500 maximum per year based on a 100% matching contribution
capped at 3% of employee compensation.
If you are age 50 or older, you may be eligible for a catch-up contribution of $2,500.
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Employee: 100% of includible compensation up to $17,000 in 2012.
If you are age 50 or older, you may be eligible for a catch-up contribution of $5,500.
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Required Employer Contributions |
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None. |
Employer must contribute
either:
1. A 100% matching contribution capped at
3% of employee compensation. (Lower cap but not below 1% may be elected in 2 out
of 5 years), or
2. A 2% non-elective contribution for each eligible
employee. (Based on the first $250,000 of compensation in 2012.)
Note: No additional contributions may be made to the
plan. |
None. |
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Are Employees Allowed to Contribute? |
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No. |
Yes. |
Yes. |
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Required Employee Eligibility |
| Age 21 with
service in 3 of the last 5 years. |
Employees
who:
1. Received at least
$5,000 in compensation during any 2 preceding years, and
2. Are reasonably
expected to receive at least $5,000 in compensation during the current year. |
Any employee
is eligible as long as their employer is making section 403(b) salary reduction
contributions available. |
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Deadline for Establishing
a Plan |
| Due date for
filing the company's income tax return plus extensions (usually April 15). |
October 1 of
the year the first contribution will be made. |
N/A |
|
Contribution Deadline |
| Due date for
filing the company's income tax return plus extensions. |
Employee contributions
are made through salary deferrals.
Employer
contributions can be made up to the due date for filing the company's income tax
return plus extensions. |
Contributions are made through
salary deferrals. |
|
Vesting |
| 100% vested
at all times. |
100% vested
at all times. |
100% vested
at all times. |
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Key Benefits |
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Inexpensive.
Flexible Contributions.
No
Annual Form 5500 Filing.
No Discrimination Testing.
High Contribution Limits. |
Inexpensive.
No
Annual Form 5500 Filing.
No Discrimination Testing. |
Inexpensive.
No
Annual Form 5500 Filing.
No Discrimination Testing. |
DEFINED CONTRIBUTION (KEOGH) PLANS
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Profit Sharing
|
Money
Purchase Plan
|
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Eligible Employers
|
| All
employers, including sole proprietors, partnerships, and corporations. |
All
employers, including sole proprietors, partnerships, and corporations. |
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Contribution Limits
|
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0-25% of compensation annually up to $50,000 per eligible employee in 2012.
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1-25% of compensation annually up to $50,000 per eligible employee in 2012.
|
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Required
Employer Contributions
|
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No. |
Yes. |
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Are Employees Allowed to Contribute?
|
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No. |
No. |
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Required Employee
Eligibility
|
| Age 21
with 2 years of service; 1 year if there is a vesting schedule. |
Age
21 with 2 years of service; 1 year if there is a vesting schedule. |
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Deadline for Establishing a Plan
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| Plan
and Trust must be established by the employer's fiscal year end (usually
by December 31). |
Plan and Trust
must be established by the employer's fiscal year end (usually by December 31). |
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Contribution Deadline
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| Due
date for filing the company's income tax return plus extensions. |
Due
date for filing the company's income tax return plus extensions. |
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Vesting
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| Various vesting schedules allowed. |
Various
vesting schedules allowed. |
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Required Reporting
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Possible 5500 Filing.
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Possible 5500 Filing.
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Key Benefits
|
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Maximum
contributions allowed.
Flexible
contributions.
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Maximum
contributions allowed.
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Next Steps
Our PlanSelector tool will help you define your objectives and identify which types of retirement plans best meet your goals.
For more information on the plans we offer, contact our Investment Specialists at 1-800-359-3379, or request an application kit today.
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Secure Account Access Login
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