401(k) Defined Contribution Plans

Overview

The 401(k) defined contribution plan is a cornerstone of benefits programs and has been since the late 1970s, and continues to increase in demand as their access expands.

These plans are excellent tools for employers to help their employees save for retirement. They are easy to adopt, and plan sponsors should be diligent in their management as it relates to plan documentation and compliance, fiduciary responsibility, investment selection and monitoring, employee communication, and ongoing plan review. Given these complexities, plan sponsors need strong partners such as advisors and third party administrators to support the administration and oversight required.

Why Choose FuturePlan?

FuturePlan offers high-touch personalized service from local TPAs backed by the strength and security of a large national firm.

Breadth of experience

FuturePlan experts have been designing and implementing 401(k) plans for the past 50 years and serve more than 35,000 401(k) plan clients across all industry sectors.

Guidance on Advanced Plan design

Plan design can be complex and requires an experienced professional to meet a company’s goal for establishing a retirement plan. FuturePlan will assess firm demographics, employee eligibility, vesting schedules, contribution types, nondiscrimination testing, and many other aspects. In addition, an in-depth analysis is needed to recommend an appropriate plan type (e.g., a cross-tested or age-weighted plan, a profit sharing only plan, a profit sharing with 401(k), a 401(k) with an automatic enrollment feature, a safe harbor plan, etc.)

Industry knowledge

FuturePlan has some of the most credentialed and knowledgeable retirement plan practitioners in the world and is supported by a deep bench of more than 460 experts, 45 actuaries, and one of the industry’s largest in-house ERISA teams.

Service Standards

Detailed service standards are maintained and monitored on a daily basis to evaluate turn-around times and ensure satisfaction.

Ideal Candidates

Defined contribution plans are ideal for both small and large businesses. Good prospects generally include:

  • Any employer with over two employees.
  • Employers who want to remain competitive in the marketplace by offering a 401(k) plan as part of their benefits package.
  • Profitable companies who can maintain a consistent employer match if they so choose to offer one.
  • Employers who may have a workforce requiring a wide range of investment options.

Plan Advantages

Ease of Access

Any business can establish a 401(k) plan, including: C Corporations, S Corporations, partnerships, sole proprietorships, and the self-employed.

Attract and Retain Top Talent

A 401(k) plan can make a firm’s retirement package much more appealing to current and future employees.

Flexibility

Access to 401(k) funds are made available to employees and plans may opt to include loan features as well.

Investment Variety

401(k) plans offer a large range of investment options to support participants with varying degrees of experience and risk tolerance.

Optional Participation

Plan sponsors may choose to automatically enroll their employees into a 401(k) plan, and participation is still optional for employees. In addition, employees determine how much they wish to contribute to their plan and can change their rate at any time.

Tax benefits

Pre-tax contributions made by employees helps lower their taxable income and earnings grow tax deferred.

Portability

If participants leave an employer, they can rollover the assets into an IRA or another 401(k) plan, or leave the assets in the plan to continue to grow.