Comparison of Retirement Plans

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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 $16,500 for 2010 (Indexed for inflation each year) or 100% of compensation
Solo 401(k)	Defined Contribution	Sole proprietorships, partnerships, limited ability companies and corporations with no common law employees	Yes		Low to Medium	The lesser of $16,500 for 2010 (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 $16,500 for 2010 (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 $11,000 for 2010 (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 $11,000 for 2010 (Indexed for inflation each year) or 100% of compensation

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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 possible 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
SIMLE IRA	Any date between January 1st and October 1st; as soon as administratively possible 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

SIMLE IRA

Roth IRA

SEP IRA

Simple 401(k) #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

Yes #3

Yes

Immediate on Employee Contributi-ons; Employer contribute-ons can be subjected to vesting schedule

Emp-loyer option

Yes #6

Solo 401(k)

Yes

Yes #3

Yes

Immediate

Emp-loyer option

Yes #6

Safe Harbor 401(k)

Yes

Yes #3

Yes

Immediate

Emp-loyer option

Yes #6

Simple 401(k)

Yes

Yes #3

Yes

Immediate

Emp-loyer option

Yes #6

Profit Sharing

Yes

Yes #3

Yes

Employer contributi-ons can be subjected to vesting schedule

Emp-loyer option

SEP IRA

Yes

Yes #3

Yes

Immediate

SIMPLE IRA

Yes #2

Yes #2 #3

Yes #2

Immediate

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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 income
SEP IRA	Withdrawals can be taken 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 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

Even though a plan may accept rollovers, they are not required to do so. Hardship distributions cannot be rolled over.
Only after the individual has participated in the SIMPLE IRA for two years.
Some retirement professionals do not believe that the IRS Code permits such a rollover.
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.
Roth 401(k) funds can only be rolled over to a designated Roth 401(k) account within 401(k) plan or to a Roth IRA.
This is a design option that the plan may or may not permit.

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