The Plan
The Sensible 401k™ Plan is a simple 401(k) plan for businesses of all sizes that are looking to reduce cost, form partnerships with reliable investment managers of your choosing, and reap tax benefits, while also rewarding employees. With pre-selected investment options from professional asset managers, it's never been easier for you and your employees to diversify your accounts and start saving immediately.
The Sensible 401k™ Plan Features
Eligibility
Eligibility can be determined by the Plan Sponsor. Once employees are eligible they can begin the enrollment process easily with our online enrollment process. They'll begin saving for their future and start saving on income tax immediately!
Pre-Tax Employee Contribution
With pre-tax employee contributions, your participants can elect to contribute a portion of their salary to the retirement plan on a pre-tax basis. Saving for retirement and saving on taxes are two very important benefits.
Employee Roth Contributions
With Roth contributions employees can elect an after-tax contribution. Participants can elect to contribute a portion of their salary to the retirement plan on an after-tax basis. The contributions and the earnings on Roth contributions are not taxed upon withdrawal - as long as those contributions remain in the plan for at least 5-years.
Online Enrollment
Employees will be able to enroll online, making the plan's operation more seamless and easier to operate. Reporting is always available to the plan sponsor for easy access. The Sensible 401k™ Plan offers online, interactive video education and enrollment for plan participants. These videos are designed to educate and assist plan participants with making informed decisions about how much to save, how best to invest, as well how to get to their retirement goals.
In-Service Withdrawals and Hardship Withdrawals
In-service withdrawals are allowed at age 59 1/2 with The Sensible 401k™ Plan as long as they are allowed in the plan's provisions. If the plan allows, participants, who are still actively employed at the in-service age, will have total flexibility on planning for their retirement.
Hardship withdrawals can be made available to plan participants to have the option to withdraw only what they contribute to the plan on account of a financial hardship. The participant would have to meet certain criteria to be eligible for a hardship withdrawal.
The Sensible 401k™ Plan Options
Employer Contributions
This optional element allows the employer to make tax-deductible contributions to the retirement plan on behalf of their employees. Contributions can be made as a match, a safe harbor, or profit-sharing contribution option.
Safe Harbor Contributions
Safe harbor contributions automatically satisfy certain non-discrimination testing and allow employees to maximize their contributions. Safe harbor contributions are all fully vested at the time of deposit. There are restrictions on when safe harbor contributions can be added to a plan as well as different types of Safe Harbor Contributions.
Click here for information on safe harbor options.
Matching Contributions
An employer match is a great benefit to employees! The employer can elect to make discretionary matching contributions. Matching contributions do encourage plan participants to contribute to save for retirement. A matching contribution is made only to participants who elect to contribute to the plan, thereby "matching" the amount contributed. The formula for a discretionary matching contribution is selected by the employer. Examples of matching contributions could be: 50% match on employee contributions up to 5% of pay or 10% match on employee contributions up to 2% of pay. A discretionary match can virtually be any formula as long as it is applied in a uniform and nondiscriminatory manner.
Profit Sharing Contributions
Profit-sharing is another great employee benefit! Profit Sharing contributions allow the employer to make contributions to employees who are eligible for the plan by contributing a flat percentage of their pay to their plan. OR, the employer can elect to contribute a flat specified dollar amount to the plan. A flat dollar amount contribution would be allocated to eligible plan participants based upon the plan's allocation provisions. MVP retirement plan experts can assist our clients with making sure the best allocation method for their company is selected!
Loans
The Sensible 401k™ Plan does allow for the option to make loans available to plan participants. Participant loans provide access to the participant's account balance by borrowing directly from their individual accounts. Restrictions do apply to participant loans.
