Plan description

A "super comp" plan benefits owners who are closer in age and/or salary to their employees by combining the new comparability profit sharing plan with the safe harbor 401(k).

Key features

• Incorporates the features of a new comparability profit sharing plan with 401(k) safe harbor provisions.
• A new comparability profit sharing plan groups your employees into categories and then bases the formula on each group as governed by nondiscrimination regulations.
• A safe harbor 401(k) permits employers to choose either a 3% profit sharing contribution or a 4% matching contribution on a 5% deferral.
• Employees may defer without 401(k)-type discrimination testing.
• All contributions must be 100% immediately vested.
• Participant loans are available.
• Withdrawals are governed by the plan document and may be restricted.¹

Who can establish

Businesses, partnerships, S-corporations², C-corporations² and nonprofit groups (no governmentals). Employers must provide a 30-day notice before establishing the plan.

Annual contributions

Please see Retirement Plan Limits for the current compensation and contribution limits for this plan.

Annual fees

Due to the complexity involving the contribution calculation, third-party administrative services are required.

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¹ Amounts withdrawn from retirement plans are generally includable as taxable income in the year received and may be subject to tax penalties if withdrawn prior to 59 1/2.

² S-corporations and C-corporations are two different types of legal structures, each of which is subject to different tax rules.

This information does not constitute tax advice. Please consult your tax advisor about your particular situation.