Skip to ContentSkip to Footer
Mature women sitting contentedly looking out a window.

Named for the Tax Code section that governs them, 401(k) plans are the most popular employer-sponsored retirement plans in the U.S. For the most part, they have replaced the pension plans employers once provided for employees.

About 401(k) Retirement Plans

As a feature of a qualified profit-sharing plan, a 401(k) allows your employees to contribute portions of their salary to individual accounts. Except for designated Roth deferrals, which are handled differently, these deferrals are excluded from the employees’ taxable income. When the employee retires, distributions, including earnings, from a 401(k) account are taxable income for the employee.

Employers can contribute additional funds to employee 401(k) accounts. To the extent that they do not exceed certain limitations, as described in the Internal Revenue Code, these contributions are deductible on the employer’s federal tax return.

Types of 401(k) Plans

Employers can choose from several types of 401(k) plans, each with its own specific rules.

Traditional 401(k)

This plan allows for payroll deductions of pre-tax deferrals from eligible employees. Employers have the option to make contributions matching employee deferrals, to contribute on behalf of all participants, or both.

Safe Harbor

In a safe harbor 401(k) plan, employer contributions are fully vested at the time they are made. Employer contributions may be matching contributions to employee deferrals or made on behalf of all eligible employees, even those who did not defer funds.

Simple 401(k)

This type of 401(k) provides a cost-efficient means for small businesses to offer a retirement plan to their employees. It is not subject to annual nondiscrimination tests. Employers are required to make fully vested contributions.

Choosing a 401(k) plan can be a complicated process. Our agent at Connor Insurance Agency in Sherrills Ford, North Carolina, can help you select a plan that is right for your company.

Secure Quote Request

* indicates required fields

This field is for validation purposes and should be left unchanged.

0/5

Great client service! Appreciate the personal relationship and care given by everyone on the Connor …

SR
Sandra R
0/5

Awesome team!! I feel like I am in good hands with Connor Insurance. Morgan does …

BD
Becky D
0/5

They are on the ball, understanding and do a great job of communicating. Super down …

NS
Nathan S
0/5

Starting with the first phone calls for your agency, I felt like you respected me …

JC
Jean C
0/5

Always ready to help with questions or problems and follow through

Anonymous
0/5

Always attentive and take care of all needs as they arise.

Anonymous

Get A Quote

* indicates required fields

This field is for validation purposes and should be left unchanged.