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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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Provider Shopping | Plan Design | 401(k) Studies

Small Business 401(k) Plan Design Study: What 3,975 401(k) Plans Are Doing

By: Eric Droblyen
March 20th, 2019

Small business owners can have dramatically different goals for their 401(k) plan. While some want to maximize key employee contributions, others want to incentivize plan participation by all employees. Business owners have nearly endless options for meeting these goals – many with very different expenses. The process of matching 401(k) goals to available options is called 401(k) plan design.

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Plan Design | Plan Setup | Fiduciary Responsibility

Hardship 401(k) Distributions – Frequently Asked Questions

By: Eric Droblyen
February 20th, 2019

A 401(k) plan may, but is not required to, allow participants to take a hardship distribution in times of financial stress. This type of 401(k) distribution can be a financial lifeline when someone has nowhere else to turn for cash. Last year, the IRS released a proposed regulation that made several changes to the 401(k) hardship rules, generally relaxing how and when these distributions may be taken. Both employers and 401(k) participants should understand how the regulation will affect their retirement plan.

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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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Safe Harbor 401(k) | Testing | Plan Design

401(k) Matching Contributions – What Employers Need to Know

By: Eric Droblyen
June 13th, 2018

One of most effective ways an employer can persuade their employees to participate in a 401(k) plan is by matching a portion of their pre-tax or Roth 401(k) salary deferrals.  This is unsurprising when you consider matching contributions are like a guaranteed return on salary deferrals - or “free” money. 

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Plan Design | Plan Setup

Solo 401(k) Plans – Their Benefits to Self-Employed Workers

By: Eric Droblyen
May 16th, 2018

401(k) plans that only cover business owners - and their spouses – are commonly called “solo” 401(k) plans. Because they don’t cover non-owners, solo 401(k) plans aren’t subject to many of the most complex 401(k) plan qualification requirements – including annual nondiscrimination testing. That makes these 401(k) plans easy to administer while allowing plan participants to receive large annual contributions - up to the 415 limit ($55,000 + $6,000 catch-up for 2018) – without restriction. These benefits have made solo 401(k) plans a popular retirement plan choice for business owners that want to save more than personal IRAs allow.

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Retirement Plan Types | Plan Design

Are Profit Sharing Contributions Right for Your 401(k) Plan?

By: Eric Droblyen
January 10th, 2018

Bar none, profit sharing contributions are the most flexible type of employer contribution a company can make to their 401(k) plan.  These contributions are not only discretionary, but they can be made to any eligible plan participant – even if the participant fails to make 401(k) deferrals themselves.  They can also be allocated using dramatically different formulas – allowing employers to meet a broad range of 401(k) plan goals with them. 

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Plan Design | 401(k) Studies

Automatic Enrollment – Is It Right for Your Small Business 401(k) Plan?

By: Eric Droblyen
October 4th, 2017

Last year, we studied the plan designs of 2,767 small business 401(k) plans that averaged approximately 25 participants and $1M in assets.  We found only 8.71% of these plans automatically enroll eligible employees who fail to make their own affirmative enrollment election.  In contrast, a 2014 Willis Towers Watson study found 68% of 457 larger 401(k) plans include an automatic enrollment feature.

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