Safe Harbor deadline looms.

Limited contributions?  Excess contributions?  Safe Harbor might be the solution... or, maybe not.

We're often called upon to solve complex problems for our plan sponsor clients.  Often, these problems stem from having outgrown their (dare we say "cookie cutter"?) plan... other times the plan never really fit at all.  Of the plan issues our clients face, failing testing and top-heavy plans are frequent.  Before defaulting to a traditional "Safe Harbor" plan, consider a few things:

  1. Safe Harbor may not be the only option.  They're often over-sold because they lead to additional commissions or compensation for salespeople.  Nonetheless, there is a cost to adding this provision.
  2. Sometimes subtle (and potentially no cost) changes can be made to the plan to positively affect top-heavy testing, therefore allowing for greater contributions.  Consider trying these remedies first, before going to a Safe Harbor.
  3. Once you've explored other options and decided that Safe Harbor is the way you want to go, you should know that there are a few different ways of obtaining Safe Harbor status.  Do the math; find the method that costs you the least or is a better fit for your circumstances.

If you find that you are interested in setting up a new calendar year safe harbor plan for 2014, please be aware that such plans are required to be established by October 1, 2014. We would be happy to assist you with this, wherever your plan is.

Many investment providers are taking 45 days or more to complete plan set-up before they can begin accepting contributions. Get ahead of this deadline, and ahead of the "fourth quarter rush" by moving sooner rather than later, especially if you're going to research the best means (see item #3 above).

Please contact Plan Partners at 440-867-8986 or jonathan@planpartners.net with questions or for more information.

 

 

 

 

The information and calculators provided via this Web site are general information, meant to introduce you to our areas of expertise.  Articles, calculators
and other sources of information are not intended to replace the professional advice of a trained financial professional.

Investment advice is offered by Plan Partners, LLC, a Registered Investment Adviser.  Plan Partners, LLC is an Ohio Registered Investment Adviser and accepts clients outside of Ohio based upon applicable state registration regulations and the “de minimus” exception.
We offer you a wide range of services that are designed to help you, such as: a 401k plan, fiduciary and plan administration, a model portfolio and executive compensation in Cleveland, Ohio.

Securities offered through IFS Securities, Member FINRA/MSRB/SIPC, 3414 Peachtree Road NE, Suite 1020, Atlanta, GA 30326, Phone: 404-382-5223. Plan Partners LLC and IFS Securities, Inc. are not affiliated companies. Plan Partners and IFS Securities do not provide tax advice. Any discussion of taxes herein is for informational purposes. You should consult with an attorney or accountant concerning tax and/or legal advice. Investing involves risks, including possible loss of principal. Please consider the investment objectives, risks, charges and expenses of any security carefully before investing.

This communication is strictly intended for individuals residing in the state(s) of: Ohio and Florida. No offers may be made or accepted from any resident outside the specific states referenced.

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