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8 Cards in this Set
- Front
- Back
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Profit Sharing Plan
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-The ER has the flexibility in making contribution.
-No limitation of the amount investing in ER's stock -EE can make withdrawals while in service. |
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Stock Bonus Plans
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-100% in ER stock
-Participants have the option to recevies cash equivalent on disribution. |
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ESOP, Employee Stock Ownership Plan
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-Allow participants the right to request the benifit to be distributed in the form of ER security (stock)
-Allow EE to ask ER to repurchase the distributed security if they are not publickly traded. -Can use leverage. The plan can borrow money to purchase ER stock. |
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NUA (net unrealized appreciation)
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-When the stock is distributed, the stock gaining is not taxble unless the participant to select of out of this treatment.
-The amount taxable on distribution is the basis established when each contribution of stock was made or purchased bh the plan. -The participant will pay long term capitable tax when the stock is sold. Question: Is the NUA treatment available for the ER stock in the 401k plan? |
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Safe Harbor 401k Plan
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ADP/ACP nondiscrimation and top heave test will be satisfied if the ER selects safe harbor plan:
-ER matching 100% of EE sective deferrals up to 3% and 50% from 3% to 5% or -ER makes a nonelective contribution of 3% for each non HCP EE. -100% vesting when the contribution is made. |
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SIMPLE 401K
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Only two contributions:
-EE slective deferral not exceed $10,000, plus $2500 for 50-old catching up. -ER match can take one of two formuals: a.Matching 100% up to 3% of EE elective deferral b. 2% nonselective match to all EE earning more than $5000 from the current year. |
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Simplifed Employee Pension (SEP)
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-ER contribution to a EE owned IRA acount.
-not a qualified plan, but having favorable tax treatment. -Contribution must be made to all EEs meeting the requirements (21-year old, earn at least $300, perform service for the ER at least 3 out of last 5 years. -ER contribution is fully discretionary -100% ownership by EEs. |
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Saving Incentive Match Plan for Employees (SIMPLE Plan)
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Eligibility:
a. No more than 100 EEs, earning at least $5000 during preceding year. b. No other retirement plan is provided by ER. Contribution: a. EE contribution, up to $10,000. b. ER matching, 100% matching up to 3%, can be reduced to 1% in 2 out of 5 years. or nonselective match: 2%. |
