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401(k) Fee Schedule (18 KB)
Competitive wages and benefit plans play a key role in attracting and keeping valued employees. A retirement plan is an integral part of the overall compensation package. QVI can provide a new plan that fits an employer’s unique requirements or if a plan is already in place, we can provide the required annual administrative services to keep the plan in compliance with Federal regulations. We offer retirement plan implementation and administrative services for businesses of all sizes including businesses with a single employee.
QVI uses the Relius Administrative System which is recognized as the industry leader in retirement plan administration. Our staff has received their Certified Administrator designation and participates in ongoing education to remain current on all changes and issues that affect a qualified retirement program.
QVI offers the following initial set up and annual administrative services:
Prototype Plans
A Prototype Plan is a document which has been pre-approved by the IRS. It is easy to prepare and can be quickly adopted at a low cost. The disadvantage is that the terms and conditions in the document are very general and do not always fit a specific requirement of an employer.
Volume Submitter Plans
A Volume Submitter Plan is part template and part custom and has been preliminarily reviewed by the IRS. The plan has some degree of flexibility to the employer and is low cost. Disadvantages are that it may not be as specific to the employers’ special needs and may need legal services to modify the document where necessary to meet such needs.
Custom Designed Plans
A Custom Designed Plan is drafted specifically for the individual employers’ needs and addresses each issue in a very specific manner. Disadvantages are that the plan has not received preliminary review by the IRS and are very expensive.
The Department of Labor (DOL) requires that certain disclosures be made to plan participants regarding the terms and conditions of the plan. A written communication of the plan SPD is the standard way of meeting this requirement and outlines the plan in easy to understand terms. The SPD must be furnished to the employee within 90 days of becoming a participant in the plan or 120 days after the plan is adopted. It must contain certain pieces of information such as the plan name, the name and address of the plan sponsor (employer), plan year as well as information on the rights under ERISA.
Employers offering 401(k) plans to their employees are required to file an annual report with the Department of Labor (DOL). The DOL Form 5500 Annual Report of Employee Benefit Plan is designed to disclose information about the plan and its operation to the Department of Labor (DOL), the plan’s participants and to the public. The report is due by the last day of the seventh month following closure of the plan year. The form can also be filed electronically through the EFAST Program.
In conjunction with the Form 5500 filing, plan participants must be provided certain information included in the filing. The Summary Annual Report (SAR) must be given to the plan participants no later than two months after the Form 5500 is filed. Information included in the SAR would include the annual participant count and specific contribution information.
There are two discrimination tests that must be performed annually using current and accurate data. The tests are:
- The Actual Deferral Percentage (ADP) test which is a mathematical test designed to compare the salary deferrals of eligible Highly Compensated Employees (HCEs) to those of the eligible Non-highly Compensated Employees (NHCEs).
- The Actual Contribution Percentage (ACP) test is applied to matching contributions and after-tax voluntary contributions. The individually calculated ratios are referred to as Actual Contribution Ratios (ACRs) instead of ADRs. The mathematical formula is the same as the ADP test.
Employers offering 401(k) plans are required to run a top-heavy test each year. This test looks at the degree to which higher-paid employees’ money dominates the plan. This test is generally run at the end of the plan year and applies to the next plan year. Top heavy plans usually are problems for small business with fewer than 25 participants.
Distribution of a participant’s funds can happen for many reasons. Examples include retirement, death, disability, severance of employment, hardships or termination of the plan. The timing and form of all distributions are governed by the plan document and the distribution method must be selected by the plan participant from those allowed by the plan. Distributions made before a legitimate distribution event may result in the plan being disqualified.
Participant loans can be an attractive plan feature that serves to encourage plan participation. However, to avoid taxation as a distribution, the plan loan program must be carefully structured. A reasonable rate of interest must be charged and loan limits are the lesser of one-half of the account balance or $50,000 reduced by the highest outstanding loan balance in the past twelve months.
QVI’s friendly staff is available by email or phone to help should you have any questions about your plan or administration services.
401(k) Fee Schedule (18 KB)
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