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Small Business 401k

Beacon Capital Management Advisors provides small business 401k plans to small business owners and to corporations ranging from 1 to 1,000 employees. BCM 401k clients benefit from our retirement plan experience due to our existing relationships with numerous small business 401k providers. Our understanding of the small business 401k plan marketplace enables us to find the 401k plan that is best suited for our small business clients. BCM is registered in 50 States.

There are two main categories of small business 401k plans.

401k for a one person business, an owner and spouse business or a partnership (no W-2 employees)

If a small business owner is the only employee or if the only employees are the owner and spouse or if the small business is a partnership that employs only the partners and has no W-2 employees then a small business owner may qualify for an Individual 401k. The Individual 401k is not a new type of 401k plan, but is simply a traditional 401k plan covering a business owner with no W-2 employees (other than themselves, their spouse or their partner in a partnership). An Individual 401k is less expensive administratively then a traditional 401k that has full time W-2 employees. Learn more about how an Individual 401k may be a good option as a Small Business 401k.

401k for small businesses with W-2 employees

If a small business owner has W-2 employees (other than the business owner or their spouse) who work more than 1,000 hours per year then they do not qualify for an Individual 401k and must establish a traditional 401k plan for their small business. 401k plans can have custom features and BCM helps small businesses with their 401k plan design to maximize the benefits to our small business clients while maintaining compliance with the IRS rules.  Below are a couple of examples.

A Safe Harbor 401k can be beneficial for small business owners who would like to contribute the salary deferral limit ($18,000 or $24,000 if age 50+), but anticipate they will fail the non-discrimination tests in a 401(k) plan. The Safe Harbor 401k plan allows owners and highly compensated employees to make the maximum salary deferral contributions to a 401k even if the other employees want to make limited or no contributions to the 401k. With a Safe Harbor 401k, the employer must make contributions to eligible employees according to one of two formulas. An employer is required to match employee contributions (100% of the participants first 3% of salary and 50% of the next 2% of salary) or make a non-elective contribution (make a contribution of 3% of salary for all eligible employees whether they contribute to the 401k or not). Each year the employer must make either the matching contributions or the non-elective contributions. The plan document will specify which contributions will be made and this information must be provided to employees before the beginning of each year.

A small business may want to add a profit sharing plan to their 401k. One type of profit sharing plan is a New Comparability Plan. If a small business owner would like to maximize the profit sharing contribution to the business owners or key employees while minimizing the contributions into the other employees they may be interested in establishing a New Comparability Plan. A New Comparability Plan is a profit sharing plan in which employees are divided into groups with each group receiving an employer contribution that is a different percentage of compensation. A small business can set up a New Comparability Plan to maximize contributions to the business owner and to benefit key employees while still satisfying IRS rules for a 401k profit sharing plan.

Small Business 401k Services

One of the important services we provide is to serve as objective 401k plan specialists to educate HR directors, CFO's and business owners on available 401k plans in the market place.

Small Business 401k Plan Provider Search

Once we have helped educate you regarding the possible 401k plan options for your firm and we know the criteria that is important to you, we begin our search to help you find a 401k provider best suited for your specific situation. Beacon Capital Management Advisors works with many small business 401k plan providers and our search to find your ideal plan is efficient, cost effective and hassle free.

Receiving a Small Business 401k Plan Proposal

Whether your company is starting a new 401k or you have an existing plan and are looking for better administration, more investment choices, lower costs or better employee education, BCM can assist you in this process. Complete the form below to receive a small business 401k proposal.


How Can BCM Help You?

Beacon Capital Management Advisors (BCM) provides 401k services to small business owners and to corporations ranging from 1 to 1,000 employees. BCM 401k clients benefit from our retirement plan experience due to our existing relationships with numerous 401k providers. Our understanding of the 401k marketplace enables us to find the 401k plan that is best suited for our clients. BCM is registered in 50 States. Complete the form below and a BCM Advisor will promptly respond to your inquiry.

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*The information on this page is for informational purposes only and does not constitute, and should not be construed as, professional, legal or tax advice. To determine your individual tax situation and specific needs, please consult a professional tax advisor.

*Information contained in these sections merely highlight some benefits. There are risks involved with all investments that could include tax penalties and risk/loss of principal.