Comparison of Elective Deferral Plans
Comparison of Elective Deferral Plans
|
SIMPLE IRA’s |
SIMPLE 401(k) |
401(k) |
SAFE-HARBOR 401(k) PLAN |
|
| Available to Employers |
100 or fewer employees |
100 or fewer employees |
Non-Government Organizations |
Non-Government Organizations |
| Can maintain another plan? |
No |
No |
Yes |
Yes |
| Eligibility Requirements |
> $5K in any 2 prior years; Expected to earn $5K in current year |
> $5K in compensation; Age 21/12 months/ 1,000 hours |
Age 21/12 months/ 1,000 hours |
Age 21/12 months/ 1,000 hours |
| Top-Heavy Contribution Rules |
No |
No |
Yes |
Yes |
| Maximum Deferral Contributions* |
$16,000 ($3,500 Catch-Up) |
$16,000 ($3,500 Catch-Up) |
$23,000 ($7,500 Catch-Up) |
$23,000 ($7,500 Catch-Up) |
| Match |
100% of first 3% |
100% of first 3% |
Flexible |
100% up to 3% 50% from 3% to 5% |
| Flexibility of Match |
With advance notification – reduce to 1% for 2 of 5 years |
No |
Yes |
Alternate Rule Available |
| Non-Elective Alternative |
2% of pay |
With notification 2% of pay |
N/A |
3% of pay |
| Vesting on Employer Contributions |
100% immediate |
100% immediate |
Yes, except for QNECs or QMACs |
100% immediate |
| Other Employer Contributions |
No |
No |
Yes |
Yes |
| Taxation on Withdrawals |
25% penalty in first 2 years; 10% thereafter |
10% early withdrawal penalty |
10% early withdrawal penalty |
10% early withdrawal penalty |
| ADP/ACP Tests |
No |
No |
Yes |
No |
| 5500 Filing |
No |
Yes |
Yes |
Yes |
| Rollovers |
After 2 years of participation or termination of employment |
Existing Rules |
Existing Rules |
Existing Rules |
* Based on 2024 Plan Year Limits