Long-Term Part-Time Employees

The Setting Every Community Up for Retirement Enhancement Act (“SECURE 1.0”) and the revised rules in SECURE 2.0 have introduced a new mandatory eligibility requirement for certain retirement plans.

Effective 1/1/2024 some employees who may not otherwise be eligible to participate in the retirement plan will be eligible to make deferrals to the plan as a Long-Term Part-Time Employee. This is due to a mandatory provision of The SECURE Act of 2019.

SECURE 1.0 Introduces Long-Term Part-Time Employees for 401(k) plans
Effective for plan years beginning on or after 1/1/2024

Under the provisions of SECURE 1.0, a Long-Term Part-Time Employee (LTPT) is an employee who has worked 3 consecutive plan years with at least 500 hours of service in each year and is not otherwise eligible for the plan. At the time of SECURE 1.0’s passing, this provision only applied to 401(k) plans, therefore only 401(k) plans have the requirement for 2024.

  • Service prior to 01/01/2021 is disregarded, for eligibility and for vesting
  • Employees must be at least age 21 to be considered eligible under LTPT rules
  • The plan can still exclude employees of a division or class of employee, so long as the classification is not based on hours or years of service
    • Example – the plan excludes the New York branch from the plan. This will still be allowed as long as the plan passes coverage testing.
  • LTPT employees must be given the opportunity to make deferrals. They are not required to receive employer contributions (this includes Safe Harbor employer contributions).
  • LTPT employees receive a year of vesting each year in which they work at least 500 hours, regardless of the plan’s vesting requirements. If an LTPT employee meets the plan’s eligibility requirements, they continue to earn a year of vesting each year in which they work at least 500 hours.
  • Collectively Bargained 401(k) plans are excluded

SECURE 2.0 Modifies the LTPT Provisions Introduced in SECURE 1.0
Effective for plan years beginning on or after 1/1/2025

SECURE 2.0 (passed 12/29/2022) reduced the requirement to 2 consecutive years of service beginning in 2025. It also clarified that service prior to 1/1/2021 is disregarded for eligibility and for vesting purposes for LTPT employees. Finally, the Act revised the original provision to include 403(b) plans that are subject to the Employee Retirement Income Security Act (ERISA), also beginning in 2025.

Additional guidance is needed from the IRS in terms of how this affects 403(b) plans. All 403(b) plans must follow the universal availability rule, which means that if any employees are eligible to make deferrals to the 403(b), then all employees must be eligible to make deferrals to the 403(b). In simple terms, universal availability means that 403(b)’s cannot have eligibility requirements for deferrals. Therefore, all employees would already be eligible to defer and the LTPT rules would not be needed. However, 403(b) plans are allowed to exclude certain classes of employees, such as those who normally work fewer than 20 hours per week, and it is possible employees in this class will need to be given the opportunity to defer into the plan if they meet the LTPT eligibility requirements. 

Excluded Classes of Employees

Exclusions can be made as long as the classification is not based on hours or service. Therefore, excluding temporary workers who meet LTPT requirements would not be allowed, but excluding a division of the company or exclusion by title would be allowed. For example, if all employees in the New York office are excluded from the plan, all employees in the New York office would remain excluded, even if they meet the LTPT requirements.

Examples of the Application of LTPT Rules

Example Assumptions

  • The plan year ends 12/31
  • Eligibility requirements are age 21, 1 year of service with 1,000 hours and monthly entry
  • The plan is not a collectively bargained 401(k) plan

Example 1 – An employee is hired 1/1/2021. They work 550 hours in 2021, 2022 & 2023. This employee is not eligible for the retirement plan because they have never worked 1,000 hours in a one-year period. However, they would be eligible as a LTPT employee because they had 3 consecutive years with at least 500 hours. They should be given the opportunity to defer to the plan beginning 1/1/2024.

Example 2 – Same facts as example 1, but instead of working 550 hours in each year, the employee only works 400 hours in 2022. In this case, the employee would not be eligible to defer 1/1/2024 because they did not have 3 consecutive years of 500 hours of service. If they worked 500 or more hours in 2024, they would have 2 consecutive years and then be eligible 1/1/2025 (SECURE 2.0 reduces the requirement from 3 years to 2 years, effective in 2025).

Example 3 – Consider a different employee with the same company. This employee was hired 1/1/2019. They worked 600 hours in 2019, 2020, & 2021, but then dropped to 200 hours in 2022 & 2023. This employee does have 3 consecutive years with at least 500 hours of service, but they would not be eligible as a LTPT employee because service prior to 1/1/2021 is disregarded.

Example 4 – An employee is hired in 2021 at age 16 and works 550 hours in 2021, 2022 & 2023. Although the employee has 3 consecutive years with at least 500 hours, they would not be eligible because they are not age 21. To be an LTPT employee, an employee must have attained age 21. Once the employee turns age 21, they would be an LTPT employee provided that they had three (two, per SECURE 2.0) consecutive years of at least 500 hours, one of which is the year in which they turn 21.

Retirement Plan Consultants Launches App for Plan Participants

Partner Code: RPC

At Retirement Plan Consultants, we’re always working to help our retirement plan participants manage their accounts. That’s why we’re so pleased to now offer our new Planlink Mobile App with easy account access and many great features for plan participants. The app is available for participant accounts only, plan sponsors are not able to login on the app.

Features for plan participants include –

          ◆    Access your account from anywhere and with touch/face ID for secure authentication

          ◆    Enroll in your retirement plan in 5 minutes or less

          ◆    Easily manage your investment portfolio

          ◆    Change your future contribution rates

          ◆    Request a loan, rollover, or lump sum cash withdrawal (if available)

We believe that Planlink will help you enjoy your experience with Retirement Plan Consultants even more. Download our app directly from the App Store or Google Play today! For questions regarding Planlink, please contact our customer service team.


Considering Switching 401k Retirement Plan Provider? Start Here!

Looking for a 401k retirement plan provider that truly understands and caters to the unique needs of your clients? Look no further than Retirement Plan Consultants (RPC). Whether you represent a small business or a large company, RPC has the ideal retirement planning solutions for you. We prioritize effective and flexible plans that are tailored to help you reach your clients’ specific goals.

Why should you consider switching your retirement plan provider to RPC? Here are a few compelling reasons:

Bundled Services: RPC specializes in bundled solutions, offering a comprehensive package that includes third-party administrator (TPA) and record keeper (RK) services. Our full-service approach allows for a streamlined experience. By housing these services under one roof, RPC saves valuable time for advisors and plan sponsors.

Fiduciary Services:  We partner with Wealth Management to offer several different 3(38) Fiduciary lineups. This alleviates time and liability from the financial advisor and Plan Sponsor.

Custom Plan Designs: Unlike many of our competitors, we provide custom and flexible plan designs. We don’t take a one size fits all approach.  We discuss the goals of each Plan Sponsor and customize the eligibility, employer contribution, distributions, and all features to fit the client.

Dedicated Plan Consultant: We understand that your time is valuable, which is why every advisor working with RPC is assigned a dedicated consultant. When questions or concerns arise, you can bypass the typical call center approach and reach out directly to your consultant for personalized support. Likewise, your clients will also have a single point of contact at RPC, ensuring prompt assistance whenever they need it.

Plans for Any Industry: At RPC, our mission is to provide personalized retirement solutions for clients across various industries. We offer a wide range of plans, including 401(k), 403(b), 457, cash balance, and more, to cater to the diverse needs of the advisors we work with.

Make the switch to RPC and experience the benefits of working with a 401k retirement plan provider that puts your clients’ success and satisfaction first. With RPC, you gain the advantage of custom plan designs, dedicated plan consultants, and a comprehensive range of retirement solutions. Contact our sales team today for more information on how to make the transition and unlock a brighter future for your clients.

Disclaimer: Investments provided through Wealth Management Nebraska LLC, Registered Investment Advisor.

This material is derived from sources believed to be reliable, but its accuracy and the opinions based thereon are not assured.

The articles and opinions in this publication are for general information only and are not intended to serve as specific financial, accounting or tax advice.

RPC and Fee-Based Advisor Partnerships

Retirement planning plays a pivotal role in establishing financial security for families. However, navigating this complex landscape can often leave individuals and employers feeling overwhelmed.

At Retirement Plan Consultants (RPC), we understand the challenges that come with retirement planning, which is why we collaborate with fee-based advisors to deliver successful plans that align with the goals of plan sponsors. With an extensive reach that spans over 1,800 plans and 25,000 participants nationwide, RPC is committed to providing high-quality service that revolves around timeliness, accuracy, and consistency. We believe that every client deserves peace of mind when it comes to their retirement, and we strive to make that a reality.

Single Point of Contact

Reflecting on the evolution of retirement plans, the traditional model typically involved insurance companies or payroll providers offering standardized plans with exorbitant fees and lackluster service standards. The subsequent trend of unbundled solutions introduced a fragmented approach, involving a local TPA, separate recordkeeper, a third-party fiduciary service provider, and the advisor. Unfortunately, this left clients feeling overwhelmed with multiple 1-800 numbers and uncertainty about whom to contact for assistance.

Our company has revolutionized the retirement planning experience by providing the ideal solution: a streamlined, turnkey process with a single point of contact. Unlike the disjointed approach of our predecessors, we handle all aspects of the process in-house, enabling seamless communication and integration between departments. As a result, advisors can focus their efforts on working directly with company executives, knowing that RPC has everything under control.

Our commitment to simplifying retirement planning is exemplified by our single point of contact services. With RPC, clients benefit from superior recordkeeping, comprehensive TPA services, and trusted fiduciary services—all conveniently coordinated through a single, reliable source. By eliminating the complexities and frustrations associated with disparate service providers, we empower clients to navigate their retirement plans with ease and confidence.

We believe that retirement planning should be a seamless and stress-free experience for everyone involved. Our integrated approach, personalized services, and unwavering commitment to excellence set us apart as the unrivaled choice for all your retirement planning needs.

Easy-to-use Platform for Advisors

At RPC, we understand the challenges advisors face when it comes to prospecting and gathering essential information. That’s why we provide an invaluable advisor toolkit, complete with a collection of sample letters and articles to support your prospecting efforts.

To further enhance your understanding of a potential client’s retirement plan, simply provide us with the company name, and we will conduct a thorough analysis of their 5500. This comprehensive assessment reveals crucial details such as the types of contributions being made, the contribution amounts, and the payment structure for each service provider. Armed with this valuable information, you’ll enter meetings fully prepared, equipped with a plan discovery scorecard that highlights key questions to ask. This scorecard empowers you to engage in meaningful conversations, demonstrating your expertise and commitment to delivering tailored solutions.

At RPC, we believe in providing advisors with the tools and insights they need to excel in their roles. With our advisor toolkit, targeted lists, detailed 5500 analysis, and plan discovery scorecard, you’ll have a competitive edge and a greater ability to forge strong connections with potential clients.

Customized Plans

With our flexible and open architecture platform, advisors have the freedom to tailor a retirement plan that perfectly aligns with the goals of the company. Whether it’s a 401k, 403b, Cash Balance, or any other type of plan, RPC empowers advisors to create a customized solution that truly fits. Our extensive offering encompasses a staggering selection of 25,000 investment options, including renowned names like Fidelity Investments, Vanguard Group, American Funds, Dimensional Funds, and many others. Gone are the days of a generic, one-size-fits-all approach.

Moreover, we pride ourselves on our transparent pricing approach. At RPC, there are no hidden fees lurking in the shadows. We believe in upfront honesty and clarity, ensuring that advisors and their clients have full visibility into the costs associated with their retirement plan.

At Retirement Plan Consultants, our mission is to provide personalized retirement solutions, with excellent customer service, that caters to the unique needs of each advisor, plan sponsor and participant.

As we look towards the future, RPC remains committed to seizing new opportunities in the ever-evolving market. We understand the importance of flexibility and transparency, which is why we offer a flat pricing structure for fee-based advisors and clients seeking a straightforward approach. We recognize the growing need for accurate retirement income projections, and we proudly introduce the Dimensional Target Date Retirement Income Funds, along with a complementary calculator to support this objective. Unlike traditional wealth management, our focus extends beyond managing account balances to ensuring a sustainable income stream that aligns with individual spending objectives throughout retirement.

In anticipation of increased regulations impacting the retirement plan market, RPC stands ready to navigate these changes on behalf of our valued partners. By entrusting us with the complexities of compliance and regulatory requirements, financial advisors can dedicate their time and energy to serving their clients with utmost dedication and care.

Choose RPC as your trusted partner in the retirement planning journey. Together, we can navigate the evolving landscape, stay ahead of regulatory changes, and provide unparalleled support to Plan Sponsors, Participants, and Financial Advisors alike. Discover why financial advisors across the industry are choosing to partner with us today! Contact our sales team for more information.

Disclaimer: Investments provided through Wealth Management Nebraska LLC, Registered Investment Advisor.

This material is derived from sources believed to be reliable, but its accuracy and the opinions based thereon are not assured.

The articles and opinions in this publication are for general information only and are not intended to serve as specific financial, accounting or tax advice.

RPC is Leading the Industry in Customer Service

Retirement Plan Consultants (RPC) is not just retirement planning. Our company goes the extra mile to ensure that participants, plan sponsors and financial advisors receive quality customer service. According to ArenaCX, statics show that 69% of customers have stopped doing business with a brand due to negative customer service experiences. Whether you have questions about a specific service or about your current plan, we have the answers.

Real people, not robots

At RPC, we take pride in our exceptional client service team, ready to assist you during business hours with any inquiries you may have. Our single point of contact approach revolutionizes the retirement planning experience, ensuring that you receive prompt and efficient support. On average, our clients experience an impressive wait time of just 25 seconds when reaching out to our service team, while our competitors’ clients often endure 5 minutes or more before connecting with a representative. We value your time and strive to deliver unparalleled responsiveness.

We believe in empowering our plan sponsors and participants with comprehensive knowledge about their retirement plans. That’s why we offer a range of tools and educational resources designed to facilitate understanding, including enrollment assistance. Step-by-step videos are readily available to guide plan participants and sponsors through the enrollment process, providing clarity and confidence. Furthermore, our dedicated client service team is always available to address any additional questions you may have, ensuring a smooth and seamless experience.

In addition, our resource centers serve as valuable hubs of information. Here, you’ll find an array of tools to support your retirement planning journey, including retirement planning calculators, an investment term glossary, and comprehensive website guides. These resource centers are dedicated to equipping both plan sponsors and participants with the necessary resources to make informed decisions and achieve their retirement goals. Explore the plan sponsor and participant resource center today and unlock a wealth of valuable information.

Our Client Service Team

Check out the friendly faces on our client service team!

Meet our client service team at Retirement Plan Consultants

Services that offer solutions

Communication can often be a challenging and time-consuming aspect when working with TPAs or Recordkeepers for advisors and plan sponsors. At RPC, we simplify this process by acting as a comprehensive solution that serves clients as recordkeepers, TPA partners, advisor partners, and independent fiduciaries. By consolidating these roles, we streamline communication channels, saving you valuable time and effort while ensuring a seamless experience.

In the realm of retirement plans, compliance is of utmost importance. We recognize the significance of adhering to regulatory requirements and maintaining the highest standards. That’s why our in-house fiduciary partners, Wealth Management, play a vital role in ensuring all compliance obligations are met. They work closely with companies to navigate the intricate landscape of regulations, while also managing investments in a manner that prioritizes the best interests of our clients. With RPC, you can have peace of mind knowing that your retirement plans are in capable hands, guided by a dedicated team that upholds compliance at every step.

By entrusting RPC as your comprehensive solution, you gain the advantage of streamlined communication, consolidated services, and a dedicated team of fiduciary experts. Together, we navigate the complexities of compliance, ensuring that your retirement plans not only meet regulatory standards but also align with the best interests of your clients.

At Retirement Plan Consultants, we are committed to delivering outstanding customer service, empowering you with the tools and resources you need to navigate your retirement plans with confidence. Experience the RPC advantage and join the ranks of satisfied clients who benefit from our exceptional single point of contact approach and access to valuable educational resources. For more information, contact our sales team here.

Qualified Third-Party Administrators for 401(k) Plans

Retirement Plan Consultants (RPC) offers qualified third-party administration for 401(k) plans to provide expertise on plan compliance, design, and consulting. For a streamlined process, RPC also bundles third-party administration with other services such as recordkeeping and fiduciary services.  As a financial advisor, recommending bundled retirement plan services showcases your commitment to providing comprehensive retirement planning solutions and positions you as a trusted partner in your clients’ financial journeys.

The Roles of Third-Party Administrators in 401(k) Plans

Third-party administrators (TPAs) maximize retirement plans while using personized guidance to create custom plans. Our consultants work in conjunction with financial advisors to ensure the company’s 401(k) plan complies with all legal requirements including document preparation, benefit statement generation, and preparing annual nondiscrimination testing.

Here are a few reasons why it’s crucial to hire a qualified third-party administrator:

  1. Expertise and Specialization: Third-party administrators possess an in-depth understanding of complex retirement plan rules, regulations, and compliance requirements. By partnering with a TPA, you gain access to their extensive expertise, ensuring your clients’ retirement plans remain compliant with ever-evolving legal and regulatory obligations. TPAs offer valuable insights, keeping you aware of changes and helping you make informed decisions for your clients’ benefit.
  2. Compliance and Risk Management: Retirement plan compliance is a significant concern, as non-compliance can lead to severe penalties and legal ramifications. TPAs specialize in navigating complex regulations and ensuring adherence to applicable laws such as ERISA (Employee Retirement Income Security Act). They conduct regular plan audits, maintain proper documentation, and handle required reporting to mitigate risks. By engaging a TPA, you offer your clients peace of mind, knowing their retirement plans are managed with diligence and compliance at the forefront.
  3. Streamlined Operations: By selecting a bundled TPA, you gain access to a one-stop solution for retirement plan administration. These TPAs provide an integrated suite of services, including recordkeeping, compliance monitoring, investment management, and participant support. Having all these functions under one roof simplifies operations for both you and your clients, eliminating the need for multiple vendors and streamlining the management of the retirement plan.
  4. Fiduciary Support: As a financial advisor, acting as a fiduciary is a crucial aspect of your role. Partnering with a bundled TPA can provide valuable fiduciary support to help you meet your obligations. Many bundled TPAs offer fiduciary services, including investment selection, monitoring, and documentation. This assistance helps ensure that the retirement plan remains in compliance with regulatory requirements, alleviating some of the fiduciary responsibilities from your shoulders.
  5. Customization and Plan Design: TPAs work closely with financial advisors to design retirement plans tailored to individual circumstances and goals. Whether it’s selecting the most suitable investment options, creating profit-sharing components, or structuring plan contributions, TPAs bring flexibility and customization to the table. This personalized approach enhances your clients’ retirement experience and strengthens their trust in your advisory services.

By consolidating services under one provider, advisors benefit from streamlined operations, enhanced efficiency, cost savings, and fiduciary support. Clients, on the other hand, experience the convenience of having all retirement plan services in one place, as well as the advantages of customized plan design. Collaborating with Retirement Plan Consultants allows you to focus on your core competencies while ensuring that clients’ retirement goals are met with efficiency, accuracy, and compliance. Embracing bundled TPAs not only simplifies your advisory practice but also enhances the value and effectiveness of your clients’ retirement plans.

Contact us today to get working with a qualified third-party administrator for your 401(k) plan!


Investments provided through Wealth Management Nebraska LLC, Registered Investment Advisor.

This material is derived from sources believed to be reliable, but its accuracy and the opinions based thereon are not assured.

The articles and opinions in this publication are for general information only and are not intended to serve as specific financial, accounting or tax advice.

Integrity Foundation Launches Impactful Nationwide Community Initiative with State-of-the-Art Playground Build in Nebraska

Designed with input from 550 local children, playground was constructed in a single-day build by hundreds of Integrity leaders, employees and community volunteers

DALLAS – AUGUST 24, 2023 – Integrity Marketing Group, LLC (“Integrity”), a leading distributor of life and health insurance, and provider of wealth management and retirement planning solutions, today announced the Integrity Foundation has completed the first of many community legacy and support initiatives to come — building a state-of-the-art playground in Norfolk, Nebraska, to benefit generations of children and families. Located in Norfolk’s historic Liberty Bell Park, the playground was designed over several months and then built in one day through partnership with KABOOM!, the City of Norfolk, and Integrity partners Premier Marketing and WealthFirm. Integrity’s purposeful revitalization of this beloved park in the heart of the community will result in long-lasting and positive impact on the health and well-being of local children and families for generations to come.

The Norfolk playground build is one of the largest charitable endeavors led by Integrity’s recently established Integrity Foundation, a 501(c)3 public charity founded to drive meaningful and sustainable change that improves the health and wellbeing of the millions of people it serves nationwide. With an expansive national network of partners, employees, agents, customers and carriers, Integrity is uniquely positioned to mobilize its many stakeholders and connect them to enriching opportunities that help protect the life, health and wealth of people all across the country.

“The Integrity Foundation was created to put powerful action behind our core values of Integrity, Family, Service, Respect and Partnership in the communities where our partners and employees live and serve,” explained Bryan W. Adams, Co-Founder and CEO of Integrity. “This playground build is a great example of the countless far-reaching support initiatives to come — in communities throughout the nation — that reflect our mission to improve the interrelated pillars of life, health and wealth that affect all Americans. We’re honored to come together with our amazing partners at Premier and WealthFirm, as well as the City of Norfolk, to build a state-of-the-art play space where families will be able to recreate, thrive and spend meaningful time together for generations. It was especially important to drive this project forward in the community of Norfolk, which has been an important part of the Integrity story since the beginning. The joy this new playground brings is evident to anyone who visits, and we’re grateful we could support and enrich the lives of families as they plan for the good days ahead!”

Service is a cherished core value at Integrity. The company provides its employees with two full days of paid time off annually to serve in their communities in a wide variety of settings. To accomplish the colossal and impressive undertaking of building the entire structure top-to-bottom in one day, the Integrity Foundation utilized the time, talents and dedication of hundreds of volunteers. Coming together in a spirit of generosity, employees and family members from Integrity, Premier and WealthFirm united with community members to construct the massive playground and gathering spaces at a record-setting pace. Volunteers completed physically challenging tasks such as hand mixing over 13,000 pounds of concrete, moving 150 cubic yards of mulch weighing more than 100,000 pounds, assembling benches and picnic tables, as well as constructing and installing 22 key playground elements.

Before the historic build day, the playground structure itself was designed using input collected from more than 550 local children who submitted drawings of their dream playground. These designs were then reviewed by more than 200 community members who integrated them into the final artistic and functional design decisions — and the Integrity Foundation worked side-by-side throughout the entire process. The playground and picnic areas will serve as a gathering place for families and create an increased sense of belonging and civic pride for community members of all ages.

“We are deeply appreciative of all the Integrity employees who generously volunteered their time and energy to make this Build Day possible,” said Josh Moenning, Mayor of Norfolk. “The Integrity Foundation recognized a significant need in our community and in true Integrity fashion, the team rallied together to exceed our expectations in fulfilling it. This revitalized space in the heart of Norfolk will once again become a place of connection for our community and it wouldn’t have been possible without the unwavering commitment and support of the Integrity Foundation and those who lead it.”

“From its earliest beginnings, Integrity has been committed to giving back to the communities we serve,” said Tom Schueth, Co-Founder of Integrity and Premier. “We couldn’t be prouder that the Integrity Foundation’s first of many planned local playground initiatives is right here in our community — creating impressive momentum that will spread across the country. It’s exciting to think about the positive impact the Integrity Foundation will extend to communities far beyond Norfolk and it’s an incredible honor to support those efforts.”

“Creating this interactive playground leaves a legacy that benefits our community for generations,” shared Mike Wingate, Co-Founder of Integrity and Premier. “Some of our employees who helped build the playground grew up visiting and enjoying this park as kids — and now their kids and grandkids will play here with them. It’s another way Integrity acts on the principles and values of caring for and serving the needs of all Americans that the company was founded on.”

“Integrity is a company that truly puts its core values into action and exhibits a sincere willingness to lead with a servant’s heart,” said Nancy Brozek, Co-CEO of WealthFirm. “We’re grateful the Integrity Foundation gave us the amazing opportunity to come alongside them and contribute to such a meaningful local initiative. This project has reenergized the park’s vibrant history and created a fun, useable space for our entire community.”

“Integrity has always been incredible in the ways it supports its partners and today, they showed they support the health and growth of our community as well,” explained Jared Faltys, Co-CEO of WealthFirm. “It’s inspiring to be partnered with a company that cares about those they serve so deeply and wants to make a difference, and they consistently put that desire into meaningful action. The impact we can make when we work together as one is truly unlimited.”

Integrity and its partners have committed additional donations to continue sponsoring local initiatives that support the Integrity Foundation’s key focus areas of investment across the United States.

NEWS PROVIDED BY Integrity Marketing Group, LLC 

Safe Harbor 401(k) Retirement Plan for Employers

What is a Safe Harbor 401(k) Plan?

A safe harbor 401(k) plan is a popular retirement plan for small businesses. To qualify as a safe harbor 401(k), there are two requirements: a mandatory contribution and participant notices. By fulfilling these two requirements, the plan can automatically pass annual nondiscrimination testing. This flexible plan is an attractive type of 401(k) used by small businesses today because it allows owners to contribute up to IRS limits with no concerns of receiving refunds of their contributions if there were to be testing problems.

There are many reasons companies are switching to a safe harbor 401(k) plan, including failure of previous nondiscrimination or compliance tests, wanting to contribute more without risk of nondiscrimination testing failure, or a company is required to make contributions to keep plans compliant.

Benefits of Safe Harbor 401(k) Plans

Safe harbor 401(k) plans automatically pass key nondiscrimination tests by fulfilling basic requirements.

For small companies with top heavy 401(k) plans, a safe harbor plan may be best suited, as safe harbor 401(k) plans normally automatically pass the top-heavy testing. A top heavy 401(k) plan is a plan where the “key-employees” own more than 60% of the value of the plan assets. (please note – there are a few exceptions to the automatic test pass rule)

Safe harbor 401(k) plans are designed to have a fixed and mandatory contribution and, in most cases, required to be immediately 100% vested, but the employer does have a range of options within a safe harbor plan.

The required employer contributions offer a generous retirement benefit to employees – which may aid in recruiting and retaining of employees.

Thinking About Starting a Safe Harbor 401(k)? The SECURE 2.0 Act Added Additional Benefits for a Variety of Retirement Plans – Including Safe Harbor 401(k) Plans

Companies may be able to benefit from small business tax credits. The SECURE 2.0 Act has modified tax credits for small businesses with up to 50 employees. Employees may be eligible for a tax credit to cover 100% of plan start-up costs for a workplace plan (up from 50%) capped annually at $5,000 per employer (which remains unchanged) for each of the first three years. Eligible businesses with 51 to 100 employees are still subject to the original SECURE Act’s tax credits equal to 50% of administrative costs, capped annually at $5,000 per employer for three years. Small businesses may also claim an additional $500 tax credit per year for a three-year period by adding an automatic enrollment feature to either a new or existing 401(k) plan. In total, this could save $16,500 over three years.

Types of Safe Harbor 401(k) Plans

Safe harbor match – With a basic safe harbor match, a company will match 100% of contributions up to 3% of the employee’s annual compensation, plus 50% on the next 2%. Employees would have to contribute 5% to receive a 4% match. With an enhanced safe harbor match, typically an employer will match 100% of contributions on 4% of an employee’s annual compensation but cannot exceed 6% total.

Non-elective safe harbor – With this plan, all eligible employees will receive a 3%, or more, employer non-elective contribution, regardless of whether the employees make salary deferral contributions to the plan.

QACA safe harbor (Qualified automatic contribution arrangement) – With a QACA safe harbor match, employers match 100% of the first 1% of compensation, plus 50% on the next 5% of compensation (3.5% total). With a QACA safe harbor non-elective, it is the same as a traditional non-elective safe harbor, employees receive at least a 3% employer non-elective contribution. The unique feature with a QACA safe harbor match or non-elective is that you are allowed to have a vesting schedule.

All safe harbor 401(k) plans, regardless of type, are set up for companies to commit to for one year with strict deadlines. There are certain changes that are permitted to the plan mid-year. Employees can contribute up to $22,500 (or $30,000 if they are 50 or older) from their salary per year.

Find Out More About Safe Harbor 401(k) Plans

Choosing the best plan for a business comes down to the retirement plan goals, how much the plan sponsor wants to save and whether the plan is being set up specifically to attract and retain employees. Retirement Plan Consultants (RPC) is an established retirement plan provider that offers safe harbor 401(k) plans for small businesses. Our sales team is available to put together a customized plan for companies. Contact us to maximize tax savings by offering a safe harbor 401(k) plan.

Profit-Sharing Benefits Employees and Employers

Whether you’re a non-profit organization or small business, there’s opportunity to offer profit-sharing plans to employees, even if you already offer another type of retirement plan. A profit-sharing retirement plan is a plan designed to give employees a share in their company’s profit based on earnings.

This plan is available to all sizes of companies and flexible in design. One of the most notable features of a profit-sharing plan is the ability to have varying contribution amounts to the plan each year. Having flexibility in contribution amounts makes profit sharing an attractive option for businesses whose cash flow may not be consistent year-to-year.

Profit-sharing retirement plans offer several benefits to an employer with minimal restrictions; however, the IRS does require profit-sharing plans to have a set formula that will determine how the contributions are divided between each employees’ accounts.

Participation, Contributions and Vesting

Profit-sharing plan participation:
In general, a plan must be offered to all employees. There are a few exceptions to this requirement such as being under 21 years of age, time-worked, etc.

Profit-sharing contribution rules and limits:
A company doesn’t have to be profitable to offer (and contribute) to a profit-sharing plan. Typically, a plan will base contributions on profit, but that doesn’t have to be the case due to the minimal contribution restrictions. For most plans, contributions are made by the employer. The plan would need to include a 401(k) cash or salary deferral feature to allow for employee contributions.

The per-participant annual employer contribution limit is the lesser of:

               -100% of participants compensation, or

               – $66,000 for 2023 ($61,000 for 2022; $58,000 for 2021)

Profit-sharing vesting options:
Lastly, an employer can choose for funds contributed to employees to be vested over a period of time (according to a vesting schedule), or funds maybe be fully vested immediately. If there is a 2-year waiting period to participate in a company profit-sharing plan, funds will be fully vested at the time of contribution.

Benefits of Profit-Sharing Plans for Employers (and the Cons)

Substantial tax benefits
If an employer contributes to a profit-sharing plan, they can deduct 25% of the compensation paid during the taxable year to all participants.

Aid in employee recruitment and retention – It’s an attractive benefit that current and prospective employees may appreciate – especially if offered in conjunction with a regular 401(k) plan. Profit-sharing provides an avenue for an employer to make larger contributions to an employee’s retirement plan, helping the employee build savings for their future.

Plan design is flexible – Contributions can be changed year-to-year if needed based on business income.

Form 5500 requirement
– Employer will need to file a Form 5500 annually.

Summary Plan Description (SPD) requirement – A SPD explains the plan and participants rights and responsibilities. When a participant enrolls in the plan, the SPD must be given to the participant. The SPD must also be given out periodically while the company has an active plan profit-sharing plan.

Discrimination testing – Required to ensure HCEs are not being favored.

Cost – Profit-sharing plans increase compliance workload which can lead to heightened administrative costs. For some businesses, the tax-savings outweighs the administrative costs and makes profit-sharing the wise choice.

Retirement Plan Consultants can create a plan cost comparison to show how profit-sharing may benefit a business. Click here to request a proposal.

Benefits of Profit-Sharing Plans for Employees (and the Cons)

Not part of taxable income
– Profit-sharing contributions added to retirement accounts do not increase taxable income.

Can still contribute to another retirement plan – The employer contributions do not count towards an individual’s 401(k) contribution limit.

Higher employer contribution limits – Plans have higher employer contributing limits compared to traditional retirement plans, allowing for the potential to put more money in employees’ pockets.


Employer may choose not to contribute – An employer is not required to contribute anything. If the only plan offered to an employee is a profit-sharing plan, it may be wise move to open another account to save for retirement.

Types of Plans

  • Stand-alone plans that only have employer profit-sharing contributions
  • Plans that are combined with, and part of, a 401(k) plan, to allow for employee contributions

Since a profit-sharing plan is a qualified retirement plan, it must comply with the ERISA rules, whether stand-alone or combined with another plan. Your retirement plan provider can walk you through the plan design discretions, set parameters and provide service to ensure the plans follow compliance.

Before a company can offer a profit-sharing plan, there are a few items to consider:

  • Hire Retirement Plan Consultants to help set up the plan
  • Decide what features the plan will offer
  • Notify eligible employees and provide information for decision-making
  • Set up a trust for the plan or set up plan with insurance contracts
  • Confirm recordkeeping services with Retirement Plan Consultants
  • Decide on annual employee contributions
  • Gain understanding of companies fiduciary responsibilities (RPC can help with this!)
  • Adopt a plan to monitor the plan’s service providers
  • Finally, gain understanding of the reporting and disclosure requirements of the profit-sharing plan

Set up a 401(k) with a Profit-Sharing Plan Now

Retirement Plan Consultants (RPC) is ready to help set up a profit-sharing retirement plan or incorporate a profit-sharing feature into an existing plan. The current timing is ideal for establishing a profit-sharing 401(k) as the SECURE 2.0 Act provides added benefits in addition to the usual tax savings of a profit-sharing plan. To initiate a profit-sharing retirement plan, contact the experts at Retirement Plan Consultants today!

401(k) vs. 403(b) – What’s the Difference?

The most well-known retirement plans offered by employers are 401(k) and 403(b) plans. In general, these plans have a lot in common, however, there are a few distinct differences between a 401k vs. 403b that can determine which is the right plan for your business. The main difference is that 401(k) plans are offered by private, for-profit businesses, and 403(b) plans are typically offered by non-profit or government organizations.

What’s a 401k?

A 401(k) is a retirement plan set up by a for-profit employer that allows employees to save in a tax-sheltered way. A 401(k) plan can offer multiple investment opportunities, including mutual funds, annuities, stocks, ETFs, and bonds.

Employers can match contributions up to a certain amount per year. ERISA guidelines limit how much the employees can contribute. For 2023, the maximum you can contribute is $22,500. If you are 50 or older, you are eligible for catchup contributions of an additional $7,500 per year, in 2023.

A 401(k) retirement plan allows for features that are customizable. All 401(k) plans are subject to nondiscrimination testing which may lead to higher administrative costs. Other costly responsibilities for a 401(k) may include set-up costs, payroll integrations, employee matches, per-participants fees, and various compliance tasks.

One way to help lower costs and simplify administration of a 401(k) is by offering a safe harbor match. Offering this match eliminates the requirement for discrimination testing. A retirement plan provider can customize the plan to include a safe harbor match.

Another customization option for a 401(k) plan is to offer a tax-savings feature called profit-sharing. A profit-sharing plan is a defined contribution plan where contributions are only made by the employer. There are unique and attractive benefits to offering profit-sharing for both the employer and employee. An advisor can help educate employers on regulations and benefits of profit-sharing.

Types of 401(k)s

There are several different 401(k) retirement plans. Here is a list of a few of the more common ones below.

  • Traditional 401(k) – most common plan that gives employees a choice of investment options, tax-deferred, employer has the option to offer a match
  • Roth 401(k) – an account funded with post-tax money, withdrawals are tax-free with the exception of the employer match funds
  • SIMPLE 401(k) – offered by small businesses with 100 or fewer employees
  • Solo 401(k) – designed for self-employed business owners, who have no employees (spouses who earn income from the business may also participate in a solo 401(k) plan)
  • Safe Harbor 401(k) – requires the company to make contributions to plan participants through a match or non-elective contribution

What’s a 403b?

A 403(b) retirement plan is only available to tax-exempt 501(c)(3) non-profits, government employers, schools, hospitals, and certain religious organizations. Typical participants of these plans may include teachers, nurses, doctors, government employees, clergy and a variety of other positions. A 403(b) plan can include pre-tax or Roth contributions. 403(b) investment options are limited to mutual funds and annuities.

One advantage to a 403(b) is universal eligibility for all employees, this makes administrative testing easier. One exception to this rule is if an employer has a 403(b) plan that offers a match for their employees, then the employer is required to follow the ERISA regulations.

A 403(b) plan has the same general contribution limits as a 401(k), but also has the perk of additional contribution opportunities for employees who have worked for a qualified organization for 15 years or more. Qualifying employees can contribute up to $3000 in additional funds per year, up to five years over the federal maximum.

Types of 403(b)s

There are a variety of 403(b) retirement plan options. Below is a list of the more common plans offered.

  • Traditional 403(b) – tax-deferred (earnings are taxed when withdrawn)
  • Roth 403(b) –employee contributes to plan after taxes have been taken out of their wages (savings and earnings are withdrawn tax-free)
  • 403(b)(7) – type of 403(b) plan commonly offered to educational employees
  • 403(b)(9) – type of 403(b) plan commonly offered to church organizations

401k vs. 403b: Which is better?

401(k) and 403(b) plans have a lot of similarities, but one isn’t better than the other. Both plans are tax-advantaged, employer-sponsored retirement plans. Whether participants have a 403(b) or 401(k), each plan will have penalties on early distributions. If a participant chooses to withdrawal before the age of 59 ½ years, they will pay a 10% early withdrawal penalty.

Business structure will likely be the determining factor if debating between a 401(k) vs. 403(b).

Find the Right Plan for Your Business

Retirement Plan Consultants (RPC) is a retirement plan provider working with fee-based advisors to offer customized 401(k) and 403(b) plans. RPC offers diversified retirement portfolios and provides resources to employers and employees to ensure a successful path to retirement.

Contact us for more information on customized retirement saving plans.