Small Business 401(k) Blog

The Frugal Fiduciary Small Business 401(k) Blog

Get the latest industry news, deadlines and tips you need to know to help tackle your fiduciary responsibility needs.

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Retirement Plan Types | Plan Design | 401(k) Administration

401(k) vs SIMPLE IRA: Which is Right for Your Business?

By: Eric Droblyen
May 27th, 2020

401(k) or SIMPLE IRA?  Whether you’re just looking to confirm a choice or haven’t even begun to make one, you know this is an important decision. The kind of plan you pick could have an enormous impact on the finances of everyone involved in your business. 

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Retirement Planning | Plan Design

The CARES Act - 401(k) Participant Distribution and Loan Options

By: Eric Droblyen
April 15th, 2020

The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 in response to the COVID-19 crisis. The Act allows – but does not require - employers to loosen the participant distribution and loan provisions of their 401(k) plan and any Coronavirus-affected individual to reduce the tax burden of most 401(k) distributions. 401(k) participants should understand their options under the CARES Act as soon as possible – this economic relief is temporary.

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401(k) Plan Design Checklist

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Subscribe to the The Frugal Financial Small Business 401(k) Blog and receive this free checklist for help in determing the best 401(k) plan design options and fit for your company.

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Retirement Plan Types | Safe Harbor 401(k) | Plan Design

Safe Harbor 401(k) Plans: Answers To Common Questions

By: Eric Droblyen
March 18th, 2020

Safe harbor 401(k) plans are the most popular form of 401(k) sponsored by small businesses today. They help business owners maximize the contributions made to their personal account by automatically passing the ADP/ACP and top heavy nondiscrimination tests. However, to achieve safe harbor status, a 401(k) plan must meet certain contribution and participant disclosure requirements. For many owners, this trade-off is worth the cost. Here’s why:

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Testing | Plan Design | Plan Setup

How to Attribute Family Ownership When 401(k) Plan Testing

By: Eric Droblyen
November 27th, 2019

It’s impossible to complete annual 401(k) plan testing accurately without a clear understanding of the plan sponsor’s ownership structure. This information is used to determine the company’s controlled or affiliated service group status as well as the Highly Compensated Employee (HCE) and key employee status of plan participants. To make these determinations properly, certain “family attribution” rules must be applied correctly. These IRS rules exist to thwart ownership structures that would otherwise permit a 401(k) plan to discriminate in favor of business owners.

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Plan Design | Plan Setup | Fiduciary Responsibility

401(k) Amendment Rules – Strict, but (Mostly) Straightforward

By: Eric Droblyen
September 18th, 2019

The day-to-day operation of all 401(k) plans must be governed by a written plan document that meets Internal Revenue Code requirements. Occasionally, 401(k) plan documents will require an amendment to reflect law changes or employer intentions. The Internal Revenue Service (IRS) has strict rules for plan amendments. It’s important for employers to understand them. Otherwise, they could miss the chance to make discretionary plan changes, accidentally cut back protected benefits, or face punishment for document non-compliance.

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Safe Harbor 401(k) | Plan Design | Plan Setup

Traditional Safe Harbor 401(k) Plan vs. QACA – How to Choose

By: Eric Droblyen
August 21st, 2019

Safe harbor 401(k) plans are the most popular type of 401(k) used by small businesses today. Unlike a traditional 401(k) plan, they automatically pass the ADP/ACP and top heavy nondiscrimination tests when certain contribution and participant disclosure requirements are met. This trade-off is well worth the cost for many business owners, who often bear the brunt of the consequences when their 401(k) plan fails testing.

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