401k plans

Baden Retirement Plan Services is an independent third party administrator (TPA) of 401(k) plans for companies with one employee and for companies with thousands of employees. These companies share the goal of setting up a tax qualified defined contribution plan that will allow employees, including owners of the company, to make tax-deferred contribution from their gross income to a retirement plan established by the employer. Our services include, among others:

• 401(k) Plan Documents
• 401(k) Plan Administration
• 401(k) Plan Compliance Testing
• 401(k) Plan Consultation
• 401(k) Plan Daily Valuation and Recordkeeping
• 401(k) Plan Form 5500
• 401(k) Plan Design   

Types of 401(k) Plans:  An employer (plan sponsor) should consult with a TPA to determine which type of 401(k) plan to install:op

• Traditional 401(k)  
• Safe Harbor 401(k) 
• SIMPLE 401(k) 
• Individual 401(k)
• Roth 401(k)

Traditional 401(k)

• Typical number of employees in the plan: Unlimited 
• Features: Provides employer the option to make contributions on behalf of all participants, to match employees’ deferrals, or do both. These contributions can be subject to a vesting schedule (which provides that an employee’s right to employer contributions becomes nonforfeitable only after a period of time). In addition, a traditional 401(k) allows participants to make pre-tax contributions through payroll deductions. Annual testing ensures that benefits for rank-and-file employees are proportional to benefits for owners/managers. A traditional 401(k) plan can be combined with other retirement plans.

Safe Harbor 401(k)

• Typical number of employees in the plan: Unlimited 
• Features: Must provide for employer contributions that are fully vested when made. However, the safe harbor 401(k) is not subject to many of the complex tax rules that are associated with a traditional 401(k) plan, including annual nondiscrimination testing. A safe harbor 401(k) plan can be combined with other types of retirement plans.

SIMPLE 401(k)

• Typical number of employees in the plan: 100 or fewer employees who received at least $5,000 in compensation from the employer in the preceding calendar year.
• Features: not subject to the annual nondiscrimination tests that apply to the traditional plans. Similar to a safe harbor 401(k) plan, however, the employer is required to make employer contributions that are fully vested.  A SIMPLE 401(k) plan may not receive any contributions or benefit accruals under any other plans that an employer might sponsor.

Individual 401(k)

• Typical number of employees in the plan: An employer with no other full-time employees except for a spouse that works full-time in the business
• Features: must follow ERISA and Internal Revenue Code requirements. Can allow for greater tax-deferred contributions limits than those available through other tax-advantaged retirement plans. A solo 401(k) plan combines with a profit sharing plan.

Back to top

Roth 401(k)

• Typical number of employees in the plan: Unlimited 
• Features: Provides employer the option to make contributions on behalf of all participants, to match employees’ deferrals, or do both. These contributions can be subject to a vesting schedule (which provides that an employee’s right to employer contributions becomes nonforfeitable only after a period of time). In addition, a Roth401(k) allows participants to make post-tax contributions through payroll deductions. Annual testing ensures that benefits for rank-and-file employees are proportional to benefits for owners/managers. A Roth 401(k) plan can be combined with other retirement plans.