PLAN ADMINISTRATIVE SERVICES
There are many complex requirements and deadlines involved in maintaining a retirement plan. The highly trained staff of The Nolan Company provides assistance during every step in the process.
The Nolan Company provides a full range of ministerial administration services for our clients including:
- Determination of optimal contribution based on plan provisions and client’s needs
- Assist in the determination of participant Eligibility
- Reconcile assets and auditing 401(k) Deferral timing for DOL required timelines
- Preparation of annual report and employee certificates
- Compliance testing, including 410(b), 401(a)4, 401(a)26, ADP/ACP, and top heavy
- Preparation and filing of Annual Form 5500
- Actuarial Services for defined benefit plans
- Calculation of Distributions, including necessary paperwork and tax withholding filings and coordination with asset custodian and preparation of Form 1099-R if needed.
- Preparation of annual notices, including Safe Harbor and PBGC notices as required
- Coordinate with ERISA attorney for plan document services
PLAN DESIGN SERVICES
After consulting with a potential client and/or their adviser to discuss their individual savings and deduction needs, we will gather census data and prepare a feasibility study at no charge. In this study we outline the plans available to meet these needs as well as the costs and responsibilities for each type of plan.
If there is an existing plan we will review and compare our recommendations to the deductions and benefits previously received.
Defined Contribution Plans
A defined contribution plan is a great way to promote savings for retirement in partnership with the employee. They have a broad range of options for employer funding and can provide 401(k) contributions to allow employee funding. Contributions grow through investment returns in a tax deferred environment.
Employees appreciate the value of these plans and the employer can maintain some flexibility in the level of employer funding. There are restrictions on how and when the employees can gain access to the funds without experiencing penalties.
A 401(k) feature gives both owners and staff a way to build tax-deferred wealth for retirement. At The Nolan Company, we help you offer this attractive option that provides value to your employees. With a 401(k) provision, your employees can contribute funds directly to their investments as either Pre-tax or Roth deferrals.
Safe Harbor Contributions. A safe harbor contribution of 3% of pay can be provided to participants which allows highly compensated employees to maximize their deferrals rather than being limited by regulatory testing.
Matching Contributions can be added as a Safe Harbor Match, fixed match, or discretionary match. We can help determine which option(s) are the best for your needs.
Employer discretionary contributions can provide additional funding to help get principle employees to the maximum allowable contribution. A cross tested formula allows you as the employer to define separate allocation rates for each of your employees. The benefit of a cross tested plan is that you can reward key employees while still providing a share of the profits to lower-level employees. With a cross tested plan, there are certain qualifications the contributions must meet for the mix of contributions being awarded to different employees. The Nolan Company staff is well versed in the complexities of compliance testing for this type of plan option.
Defined Benefit Plans
In a defined benefit plan, the employer bears the investment risk. While defined contribution plans reward the employee based on the investment returns, the defined benefit plan provides a specific benefit based on service and income. As a result, the company may be required to make additional funding to fulfill the payment to the employee if there is a shortfall in the investments’ returns.
The maximum benefit in a defined benefit plan surpasses those allowed in a defined contribution plan and can therefore be a powerful savings and deduction tool either on its own or tested in conjunction with a defined contribution plan. They can be a unique tool for quickly accumulating retirement funds.
In combination, a defined plan and defined contribution plan can enable the sponsor to cost effectively increase savings while maintaining some flexibility. This combination can provide key employees with much larger contributions than allowed in a defined contribution plan alone and the combined testing with the defined contribution plan enables flexibility and cost savings.
Traditional Defined Benefit Plan
Instead of determining contributions, and investing them to produce the greatest possible benefit, the traditional defined benefit plan defines a specific monthly benefit at retirement, and determines appropriate contributions to fund the benefit. The document can be written to provide different classes of employees different monthly retirement benefits (e.g. a higher formula to key employees).
Cash Balance Defined Benefit Plan
A cash balance plan is designed to combine the increased funding available in a traditional defined benefit plan with the straightforward presentation of a specific allocation in the defined contribution plan. The benefit is expressed as an annual allocation and individual account rather than a monthly pension payable at retirement. The plan may be structured to provide different allocations to different classifications of employees. This format is much easier for employees to understand and appreciate than a traditional defined benefit plan.