Safe Harbor 401 (k) Plan Overview:

Who Can Offer This Plan: Any size business.

Advantage:
Allows greater employee payroll reduction contributions than most other plans and, if the employer chooses, employees may direct the investment of their assets. Appropriate for larger companies who want to share plan funding with their employees. May be combined with employer profit sharing.

Administrative Expense:
Moderate to High.

Administrative Complexity:
Moderate to High.

Funding:
Pretax employee contributions, and if chosen by the employer, employer matching contributions.

Annual Contribution Limits:

Employee:
$17,500 for 2013 (additional $5,500 Catch-up, if age 50+).

Employer and Employee Combined:
$51,000 ($56,500 w/ Catch-up)

Annual Deduction Limit:
Company can contribute and deduct up to 25% of total eligible participant compensation. Employee contributions are excluded when calculating the 25%.

Loans
Loans may be a feature of the plan.

In-service Withdrawals:
In-service withdrawals for hardship or after age 59 1/2 may be a feature of the plan.

Vesting:
Immediate for employee contributions. Employer matching and profit sharing contributions may vest immediately or over time according to an appropriate vesting schedule.