Ramirez & Co. Financial Consultants are prepared
to discuss your company's retirement needs. Whether you seek advice
on starting a new retirement program or enhancing and reviewing
your current plan, our Business Financial Planners have timely advice
and creative ideas to benefit your company. Whether it is a 401(k)
or the new Uni-K, we work hand in hand with your company to help
you structure a plan that best meets your needs.
| Plan type |
Individual (401k) |
SEP |
Simple |
401(k) |
Profit Sharing |
| Overview |
A type of retirement plan designed for individual business owners. Allows for maximum contributions and tax-free loans. |
Employer makes annual contributions and/or salary deferrals which can vary from year to year. |
A simple, in-expensive plan to set-up and maintain.
Employer may make annual contributions to employee IRAs. |
Contributions can vary from year to year. |
Easy to operate, no government reporting, inexpensive plan to setup and maintain.
Offers some flexibility. |
Employer must make fixed or matching contributions to an employee’s IRA. Employees may contribute pre-tax. |
A highly visible employee benefit plan.
Employees contribute pre-tax to individual accounts; employer may contribute. |
Allows highest level of employee pre-tax contributions; flexible plan design options. |
Employer contributes a % of pay to individual employee accounts, based on company profits. Amount may vary from year to year; easy to operate and is often combined with a 401(k). |
Flexible plan design options. |
| Employers Who Should Consider |
Individual business owners. Could also include some partnerships. |
All- typically 1-25 employees. |
Limited to employers with 100 or fewer eligible employees and no other qualified retirement plans. |
All |
All |
| Minimum (coverage) Eligibility Requirements |
Plans may exclude employees who are under 21 or have less than 1 year of service. |
|
Plan must cover all employees who earn at least $500, are at least 21 and have worked for the employer in 3 of the last 5 years. |
Plan must cover all employees who earn at least $5,000 in the current year and have received at least $5,000 during any 2 preceding years. |
Plans may exclude employees who are under 21 or have less than 1 year of service. Other exclusions permitted subject to IRS nondiscrimination rules. |
Plans may exclude employees who are under 21 or have less than 1 year of service. Other exclusions permitted subject to IRS nondiscrimination rules |
Contributions |
| Participant* |
Not mandatory, but may contribute up to $15,500 pre-tax per year. (Amount is determined by plan) |
Not allowed |
Not mandatory, but may contribute up to $10,500** pre-tax (or 100% of earned income, whichever is less) |
Not mandatory, but may contribute up to $15,500** pre-tax per year. (Amount is determined by plan) |
Not permitted unless plan has 401(k) arrangement |
|
No, but permitted |
Yes, Uniform % of each participant’s pay or flat dollar amount. |
Yes. Employer must choose a fixed contribution of 2% or pay a matching contribution (conditioned on employee contributions) up to 3% of pay. |
No, but employer matching and profit sharing contributions are permitted. |
Yes. Employer contributions are discretionary and can be based on, but not limited to, profits. |
| Maximum:+ |
25% of total participant compensation.***
Total employer & participant, lesser of $45,000 or 100% of compensation |
25% of each participant’s compensation*** or $45,000, whichever is less |
3% of each participant's compensation as a match up to $10,500 |
25% of total participant compensation.*** Total employer & participant, lesser of $45,000 or 100% of compensation |
25% of total participant compensation.*** Total employer & participant, lesser of $45,000 or 100% of compensation |
| Catch-Up : ++ |
$5,000 |
None |
$2,500 |
$5,000 |
None |
| Minimum: |
None |
Can skip years (0%) |
Matching: 1% in 2 out of 5 years; or Non-elective: 2% of each employee’s compensation*** up to $4,500. |
Can skip years (0%) |
Can skip years (0%) |
