Feature |
SEP |
|
Money
Purchase |
Defined
Benefit |
| Eligibility |
Service |
Employee must work during 3 of the preceding 5 years. |
1 year, or more than 1 year/100% vesting. |
Same |
Same |
Minimum Age |
21 |
21 |
21 |
21 |
Statutory Exclusions |
Union employees & non-resident aliens with no U.S. income. |
Same |
Same |
Same |
Other Nondiscrimination Exclusions |
No |
Yes |
Yes |
Yes |
| |
How determined |
Discretionary percent comp. profits formula. |
Same |
Percent of Compensation. |
Mathematically based on projected benefit & age. |
Required |
Generally no. |
Generally no. |
Yes |
Yes |
Maximum |
25% of compensation. |
Same |
25% of compensation. |
No percent limits. |
Allocation of Employer Contribution
|
Compensation |
Proportionate using compensation as base. |
Same or units of age adjusted compensation. |
Proportionate compensation. |
N/A |
Integrated |
Uniform % of total comp. & excess comp. up to 5.7%. Balance allocated on proportionate comp. |
Same |
Same |
Same |
| |
Pre-Tax |
Yes |
Yes |
No |
No |
After-Tax |
No |
Yes |
Yes |
Yes |
Individual Annual Limitations
|
Contributions & Forfeitures |
25% of compensation. Up to 49,000. Comp Cap Applies. |
100% / $49,000 |
Same |
N/A |
Benefits |
N/A |
N/A |
N/A |
Lesser of 100% of compensation or $180,000 as indexed. |
Antidiscrimination Test Required
|
Employee Contributions |
Yes |
Same |
Same |
Same |
Employer Contributions |
No |
Matching |
No |
No |
|
Hardship |
N/A |
Yes |
No |
No |
Age 59 1/2 |
Yes |
Yes |
No |
No |
Age 62 in-service |
N/A |
N/A |
Yes |
Yes |
Termination |
N/A |
Yes |
Yes |
Yes |
Early Retirement |
N/A |
Yes |
Yes |
Yes |
Disability |
N/A |
Yes |
Yes |
Yes |
Normal Retirement |
N/A |
Yes |
Yes |
Yes |
Minimum Required Distribution's Required Beginning Date |
April 1, After Year in which Age 70 1/2 is attainted. |
5% Owners; April 1 after year in which 70 1/2 attained.
For Non-5% Owners; April 1 after the later of: year age 701/2, or year retired. |
Same |
Same |
|
Lump Sum |
Same |
Annuity |
Same as MP |
|
Lump Sum |
N/A |
N/A |
Yes |
Yes |
Installments |
Yes |
Yes |
Yes |
Yes |
Annuity |
Yes |
Yes |
N/A |
N/A |
|
Top-Heavy Plans And Non-Top-Heavy Plans as of 2007 |
N/A |
2/20 or better 3 year cliff & in 2002 all match. |
Same |
Same |
Prior to 2007 for Non-Top-Heavy Plans for ER Contributions, Other Than Matching |
N/A |
3/20 or better 5 year cliff. |
Same |
Same |
| Other Features |
|
No |
No |
No |
Variable |
|
No |
Optional |
Same |
Rarely |
|
Yes, Annually |
Yes, Annually, if only Employer Investment direction. Quarterly, if any Employee investment direction. |
Same |
Yes. Once every three years, OR Annual notice offering statement each year upon EE's request. |
Allocation of Forfeitures
|
N/A |
In proportion to compensation. Reduce employer contribution. |
Same |
Same |
|
N/A |
Based on account balances. |
Same |
N/A |
To learn more, call 973-492-1880 or e-mail info@mhco.com.
© 2012, McKay Hochman Co., Inc. All rights reserved.
