Is a Safe Harbor 401(k) Plan a Good Fit for My Business? Also, what is EPCRS?
Should you consider a Safe Harbor 401(k)?
Safe harbor plans are great! They allow highly compensated employees to to defer the maximum amount of money for retirement. They do, however, require a minimum benefit cost of 1%-4% of pay. This 1%-4% contribution allows a 401(k) plan to avoid annual nondiscrimination testing of employee elective contributions and employer matching contributions. If you are thinking of implementing a safe harbor 401(k), TPS is here to help. Our expert staff are experienced in optimizing 401(k) plans, and custom tailoring retirement plans to meet the needs of customers.
What is EPCRS?
The IRS Developed the Employee Plans Compliance Resolution System (EPCRS) to help plan sponsors avoid plan disqualification by making it easier for them to correct a wide variety of retirement plan qualification failures. If plan sponsors follow the established guidelines, they may be able to bring their plans back into compliance without losing valuable tax benefits.