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Feature Basic
Plan Type		 Who generally adopts Can employer sponsor other qualified retirement plans Who can
contribute		 Cost index Maximum employee deferral contribution
401(k) Defined Contribution Corporations, partnerships, limited liability companies Yes   Low to High depending upon design complexity, service model adopted and other factors The lesser of $15,500
for 2007 (Indexed for inflation each year) or 100% of compensation
Solo
401(k)		 Defined Contribution Sole proprietorships, partnerships, limited liability companies and corporations with no common law employees Yes   Low to Medium The lesser of $15,500
for 2007 (Indexed for inflation each year) or 100% of compensation
Safe Harbor
401(k)		 Defined Contribution Sole proprietorships, partnerships, limited liability companies and corporations Yes   Low to Medium The lesser of $15,500
for 2007 (Indexed for inflation each year) or 100% of compensation
Simple 401(k) Defined Contribution Sole proprietorships, partnerships, limited liability companies and corporations with 100 or fewer eligible employees Yes   Low to Medium The lesser of $10,500
for 2007 (Indexed for inflation each year) or 100% of compensation
Profit Sharing Defined Contribution Sole proprietorships, partnerships, limited liability companies and corporations Yes   Low to High depending upon design complexity, service model adopted and other factors None
SEP
IRA		 IRA based Sole proprietorships, partnerships, and small businesses Yes   Low None. Contributions are generally by Employer only
SIMPLE IRA IRA based Sole proprietorships, partnerships, limited liability companies and corporations with 100 or fewer employees No Employee and employer Low The lesser of $10,500 for 2007 (Indexed for inflation each year) or 100% of compensation

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Feature Employer contributions Catch-up contributions for those age 50 and older Employee eligibility Who directs investments IRS reporting by employer
401(k) Discretionary; maximum tax-deductible employer contribution is 25% of eligible payroll; overall maximum contribution per eligible employee is 100% of compensation not to exceed $45,000 $5,000 for 2007 (Indexed for inflation each year) Age requirement cannot exceed 21; service requirement can't exceed one year; may exclude union employees Employer/ Trustee or plan may allow individual direction Form 5500
Solo
401(k)		 Discretionary; maximum tax-deductible employer contribution is 25% of eligible payroll; overall maximum contribution per eligible employee is 100% of compensation not to exceed $45,000 $5,000 for 2007 (Indexed for inflation each year) Age requirement cannot exceed 21; service requirement can't exceed one year; may exclude union employees Individual Form 5500-EZ when plan assets reach $100,000
Safe Harbor
401(k)

Required match of 100% on the first 3% of employee deferral plus 50% on the next 2% of employee deferral
OR
3% of compensation to all eligible employees

 $5,000 for 2007 (Indexed for inflation each year) Age requirement cannot exceed 21; service requirement can't exceed one year; may exclude union employees Employer/ Trustee or plan may allow individual direction Form 5500
Simple 401(k)

Required match of 100% up to 3% of employee's compensation
OR
2% of compensation to all eligible employees

 $2,500 for 2007 (Indexed for inflation each year) Age requirement cannot exceed 21; service requirement can't exceed one year; may exclude union employees Individual Form 5500
Profit Sharing Discretionary; maximum tax-deductible employer contribution is 25% of eligible payroll; overall maximum contribution per eligible employee is 100% of compensation not to exceed $45,000 N/A Age requirement cannot exceed 21; service requirement can't exceed one year; two years if 100% vested; may exclude union employees Employer/ Trustee or plan may allow individual direction Form 5500
SEP
IRA		 Discretionary; cannot exceed the lesser of 25% of the employee's compensation or $45,000 N/A Age requirement cannot exceed 21; have earned compensation in three of the past five years; received compensation of at least $500; may exclude union employees Individual None
SIMPLE IRA

Required match of 100% up to 3% of employee's compensation (may be reduced to 1% in 2 of any 5 years)
OR
2% of compensation to all eligible employees

 $2,500 for 2007 (Indexed for inflation each year) All employees earning $5,000 for any past two years and is expected to do so in current year; no age limit permitted; may exclude union employees Individual None

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Feature Establishment deadline Funding deadline
401(k) By the last day of the plan year for which the plan is effective Employee contributions must be deposited as soon as administratively possible, but no later than 15 business days after the month in which the deferrals were made; employer contributions must be deposited by the time the corporate tax return (with extensions) is filed for the tax year in which the deduction is being taken
Solo
401(k)		 By the last day of the plan year for which the plan is effective Unincorporated businesses - employer/employee contributions: by the time the corporate tax return (with extensions) is filed for the tax year in which the deduction is being taken; incorporated businesses - employer contributions: by tax-filing date plus extensions and employee contributions must be deposited as soon as administratively possible, but no later than 15 business days after the month in which the deferrals were made
Safe Harbor
401(k)

Any date between January 1st and October 1st; may not have an effective date that is before the date plan actually adopted

 Employee contributions must be deposited as soon as administratively possible, but no later than 15 business days after the month in which the deferrals were made; employer contributions must be deposited by the time the corporate tax return (with extensions) is filed for the tax year in which the deduction is being taken
Simple 401(k)

Any date between January 1st and October 1st; as soon as administratively feasible for businesses established after October 1st

 Employee contributions must be deposited as soon as administratively possible, but no later than 15 business days after the month in which the deferrals were made; employer contributions must be deposited by the time the corporate tax return (with extensions) is filed for the tax year in which the deduction is being taken
Profit Sharing By the last day of the plan year for which the plan is effective Contributions must be deposited by the time the corporate tax return (with extensions) is filed for the tax year in which the deduction is being taken
SEP
IRA		 Established by the time the corporate tax return (with extensions) is filed for the tax year in which the deduction is being taken Funded by the time the corporate tax return (with extensions) is filed for the tax year in which the deduction is being taken
SIMPLE IRA

Any date between January 1st and October 1st; as soon as administratively feasible for businesses established after October 1st

 Employee contributions must be deposited within 30 days after the end of the month in which the amounts would otherwise have been payable to the employee in cash; employer contributions must be deposited by the time the corporate tax return (with extensions) is filed for the tax year in which the deduction is being taken

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Can rollover to: IRA
 SIMPLE
IRA		 Roth
IRA		 SEP
IRA		 SIMPLE
401()
#1		 Safe
Harbor
401(k)
#1		 403(b)
#1		 Govern-mental
457 #1		 401(k)
#1		 Roth 401(k) #5 Minimum
vesting		 Loans Roth Contri-
butions Allowed
401(k) Yes No No Yes Yes
#3		 Yes Yes Yes Yes No Immediate on Employee Contributions; Employer contributions can be subjected to vesting schedule Employer option Yes
#6
Solo
401(k)		 Yes No No Yes Yes
#3		 Yes Yes Yes Yes No Immediate Employer option Yes
#6
Safe Harbor
401(k)

Yes

 No No Yes Yes
#3		 Yes Yes Yes Yes No Immediate Employer option Yes
#6
Simple 401(k)

Yes

 No No Yes Yes
#3		 Yes Yes Yes Yes No Immediate Employer option Yes
#6
Profit Sharing Yes No No Yes Yes
#3		 Yes Yes Yes Yes No Employer contributions can be subjected to vesting schedule Employer option No
SEP
IRA		 Yes No Yes Yes Yes
#3		 Yes Yes Yes Yes No Immediate No No
SIMPLE IRA

Yes
#2

Yes
#2

 Yes
#2		 Yes
#2
#3

Yes
#2

 

 Yes
#2		 Yes
#2		 Yes
#2		 No Immediate No No

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Feature  When can withdrawals be taken
401(k)

Withdrawals can generally be made for the following reasons:

  • termination of employment
  • disability
  • death
  • retirement
  • hardship

If taken prior to an employee reaching age 59(1/2) may be subject to a 10% penalty; #4 withdrawals are generally considered taxable income
Solo
401(k)

Withdrawals can generally be made for the following reasons:

  • termination of employment
  • disability
  • death
  • retirement
  • hardship

If taken prior to an employee reaching age 59(1/2) may be subject to a 10% penalty; #4 withdrawals are generally considered taxable income
Safe Harbor
401(k)

Withdrawals can generally be made for the following reasons:

  • termination of employment
  • disability
  • death
  • retirement
  • hardship

If taken prior to an employee reaching age 59(1/2) may be subject to a 10% penalty; #4 withdrawals are generally considered taxable income
Simple 401(k)

Withdrawals can generally be made for the following reasons:

  • termination of employment
  • disability
  • death
  • retirement
  • hardship

If taken prior to an employee reaching age 59(1/2) may be subject to a 10% penalty; #4 withdrawals are generally considered taxable income
Profit Sharing

Withdrawals can generally be made for the following reasons:

  • termination of employment
  • disability
  • death
  • retirement
  • hardship

If taken prior to an employee reaching age 59(1/2) may be subject to a 10% penalty; #4 withdrawals are generally considered taxable incomee
SEP
IRA		 Withdrawals can be taken at any time; withdrawals taken prior to an employee reaching age 59(1/2) may be subject to IRS penalties; withdrawals are generally considered taxable income
SIMPLE IRA Withdrawals can be taken at any time; withdrawals taken prior to an employee reaching age 59(1/2) and within the first 2 years of participation, may be subjected to a 25% early withdrawal penalty; after 2 years, a 10% early withdrawal penalty would apply; withdrawals are generally considered taxable income

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#1. Even though a plan may accept rollovers, they are not required to do so. Hardship distributions cannot be rolled over.
#2. Only after the individual has participated in the SIMPLE IRA for two years.
#3. Some retirement professionals do not believe that the IRS Code permits such a rollover.
#4. There is an exception to this rule which allows an employee who retires during the calendar year in which they turn 55, or later, to withdraw without penalty.
#5. Roth 401(k) funds can only be rolled over to a designated Roth 401(k) account within a 401(k) plan or to a Roth IRA.
  #6.  This is a design option that the plan may or may not permit.
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