Section 401(k) of the Internal Revenue Code is one of the most advantageous tax sheltering devices ever established by Congress. It encourages Employers and their Employees to save money for retirement through tax deferred or ROTH payroll deductions.
401(k) plans are the most popular type of retirement program in the United States. While similar to an Individual Retirement Account (IRA), a 40l(k) differs in that greater contributions can be made, loans can be taken under certain restricted circumstances, and employers can choose to match a portion of the monies their employees contribute, increasing the leverage of each dollar of employee contribution.
Pacific Pension & Benefit Services, Inc. provides Employers with many 401(k) plan options structured within a Low-Cost Comprehensive Program
In order to successfully sponsor a 401(k) plan, together we will need to do the following:
• Design the type of plan you want (contributory or non-contributory)
• Develop an attractive investment package
• Prepare enrollment materials
• Ensure that appropriate accounting/payroll systems are in place
• Assist you in the ongoing administration and record keeping
Pacific Pension’s 401(k) programs have been created to address all your needs, from design and recordkeeping to investment options and employee communications.
Plan Design and Implementation
Your PPBS consultant will help you design the 401(k) plan that meets your needs best. This design takes into account your objectives in sponsoring the plan, general employee demographics and other employee benefit programs that you sponsor.
Your consultant reviews plan specifications with you. After the plan design is complete, a Plan and Trust Agreement and Summary Plan Description are produced. These documents must be submitted to the IRS, which will provide a determination letter as to the qualified status of the plan.
An important part of instilling a level of comfort with plan participation revolves around the investment of contributions. Participants who self-direct the investment of their contributions are the most comfortable. Participants may be allowed to choose from among many options, ranging from secure and conservative choices such as Bond Funds and Money Market Accounts to more aggressive investments in Domestic and International Growth or Value Funds.
The key to a successful 401(k) plan is a good communications system. Giving employees the opportunity to participate in a plan does not just mean making one available, but also requires providing them with enough information to make intelligent decisions about participation.
The Plans we sponsor have communications systems which contain the following materials:
• Highlight Brochure – This brochure, accompanied by your Consultant’s explanation of your Plan’s provisions insures the highest understanding of the Plan and its benefits to your staff.
• Investment Descriptions – Inserts to the Highlight Brochure describe each investment option available including historical returns, top holdings and charges.
• Online and Toll Free Phone Systems – Participants will be given full access to their accounts via website and/or telephone communication.
• Reporting for Employee and Employer – Quarterly statements are sent directly to Participants.
Recordkeeping and Administration
Proper recordkeeping is essential for the plan to operate successfully. The employer makes payroll deductions from employees paychecks remits such deductions and provides us with a report of these remittances by employee. PPBS and its administrative partners provide complete recordkeeping services which include the following:
– Employee contribution allocations
– IRS discrimination testing
– Plan distributions and related tax reporting
– All necessary government forms completion
In relationship to the benefits you and your employees derive there may not be as much cost or effort required to offer a 401(k) as you might have thought.
For additional information on 401(k) plans as well as all your employee benefit needs please contact: Pacific Pension & Benefit Services, Inc.