Smoother Sailing
Here's how the new safe-harbor retirement plan stacks up against two existing alternatives. The table assumes you choose the 3% safe-harbor plan.
| |
REGULAR 401(k) |
3% SAFE HARBOR |
SIMPLE IRA |
| COMPANY SIZE |
Any |
Any |
Up to 100 people |
| EMPLOYEE CONTRIBUTIONS |
Up to $10,000, capped at 25% of pay |
Up to $10,000, capped at 25% of pay |
Up to $6,000; no percent cap |
| EMPLOYER CONTRIBUTIONS* |
Optional |
3% for all workers |
2% for all workers, or 3% match |
| EXTRA PAYMENTS TO KEY STAFF |
No |
Yes |
No |
| LOANS |
Yes |
Yes |
No |
| FAIRNESS TESTING |
Required |
Exempt |
Exempt |
| *Other terms apply |
DATA: PIONEER GROUP, BUSINESS WEEK |
This article was originally published online as part of the February 1, 1999 edition of Business Week's Enterprise.
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