Place Trade offers a wide variety of corporate retirement plans to meet all of your business needs including Traditional 401(k) Plans for larger organizations, Self-Employed 401(k) (also known as Individual, Solo or Owner Only 401(k)s), as well as Profit Sharing and Money Purchase Plans.

What is a Qualified Plan?

A qualified retirement plan is an employer sponsored plan that meets the requirements by the Internal Revenue Service (IRS). Qualified plans must provide for all eligible employees equivalently.

Employers may take a tax deduction for contributions to a qualified plan and in some plans employees may make tax deferred contributions. No tax is due on contributions or earnings until money is withdrawn from the plan.

Money Purchase Plans, Profit Sharing Plans and 401(k)s allow for true participant self-direction, thereby reducing the employer's fiduciary responsibilities. Place Trade offers both Traditional 401(k)s as well as Individual 401(k)s.  Ask us about assisting with Employee Education as you initiate your Qualified Plan.

Self-Employed - Individual 401(k) - Owner Only 401(k)

An Individual (Owner Only or Self-Employed) 401(k) has the same characteristics as a sole proprietor Profit Sharing Plan. A popular alternative to the SEP IRA; the Self Employed allows individuals to save much more money for retirement.

Self-Employed / Individual 401(k) Plans

*Catch up contribution for individuals age 50 and older is in addition to the annual limit and the total is subject to the combined deferral and employer contribution limit.

*A qualified plan can permit 401k participants over the age of 50 to defer an extra $5,500 (in 2010) over and above the $49,000 limit [for a maximum of $54,500 in 2010 and 2011). Catch up Contributions allow older participants to maximize contributions to save for upcoming retirement.

Visit www.irs.com for more details.

General Characteristics of Qualified Profit Sharing Plans & Qualified  Money Purchase Plans

Overview:

Plans can be combined.

Definite formula for contributions.

Maximum contribution up to 25% of compensation.

Maximum contribution up to 25% of compensation (depending on the allocation method that is used, one could receive up to the lesser of 100% of compensation or $46,000).

Can fund the plan up to tax filing deadline with extensions, but plan must be established by year-end.

Can exclude part time employees (<1000 hours of service/year) or require up to 2 years of service to participate.

Can have a vesting schedule.

Qualified Profit Sharing Plans

Flexibility in funding - Employer may vary contributions from year to year

Up to 25% of plan compensation deductibility for employer

Contributions may be linked to profits

In-service distributions are permitted

Flexibility in funding up to 25% of compensation

Loans available

Qualified Money Purchase Plans

Employer MUST contribute each year

Contributions are fixed - not linked to profits

Up to 25% deductibility for employer

No in-service distributions

Eligibility

Employer Eligibility

Eligible employers include corporations, partnerships, non-profit organizations, corporations, and sole proprietors (self employed).

Employee Eligibility

An employer can always choose to make all employees eligible to participate in a qualified plan, however the employer is permitted to adopt the following eligibility requirements:

Employee must have attained the age of 21.

Employee must have completed two years of service if 100% vesting is elected, or one year of service if a vesting schedule is elected.

Employer can require up to 1000 hours of service to qualify as a year of service.

Deductibility limits can be confusing and tax laws are frequently changing. It is always best to review your specific situation and/or circumstances with a qualified tax advisor.

For more information visit www.irs.gov.

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