Open Book Retirement Solution
Our retirement plan consultants are keenly aware that for many plan sponsors, the level of expertise and commitment of time and energy required to adequately fulfill the administrative responsibilities associated with offering a retirement plan to employees is an unwelcome burden. When coupled with the significant risk of fiduciary liability, many plan sponsors want the relief available through a proper delegation to an independent fiduciary. That’s why we created our Open Book 401(k) Retirement Solution.
Fiduciary Guidance
Fiduciary responsibilities can be a burden and considerable liability is placed on Plan Sponsors. That is why our consultants guide you through the complexities and risks associated with sponsoring a retirement plan.
Retirement Plan Design
Successful participant outcomes begin with Courageous Plan Design. Our consultants have the expertise to help you design a plan that meets your company goals and that motivates your employees to save more for their retirement.
Benchmarking Analysis
Our team provides you an Annual Retirement Plan Review: a report that benchmarks your plan investments, fees, and utilization against other plans of similar size and in your industry.
Investment Monitoring
FJY Financial accepts a fiduciary role as an independent investment manager under ERISA 3(38). The greatest value in retaining a 3(38) investment manager lies in having a truly independent firm on your side of the table making well-informed decisions.
Financial Wellness
Your employees deserve tailored advice from a professional with the ability to track their progress towards their own retirement goals. Our personalized financial advice empowers plan participants to take control of their financial future.
Who We Work With
Business owners who are willing to invest in their team members’ futures. Most plans have at least $1 million of assets. Our emphasis on transparency and education enables us to help business owners mitigate the risk of sponsoring a retirement plan. In fact, you can even delegate the fiduciary liability!
Desired Retirement
by Larry Adams
As an employer sponsoring 401(k) plan, are you taking advantage of powerful techniques that will enhance the chances of your employees making it to their retirement destination? Are you using the right processes, systems, and techniques to responsibly manage your company’s retirement plan? Are you doing everything you can to ensure your employees feel confident that they will have enough money to retire and pay for all the things they desire to do someday?
Desired Retirement reveals valuable strategies that will significantly impact retirement outcome results for you and your employees.
About the Author
Larry D. Adams, CPFA®, is a registered investment advisor with over thirty years of experience in financial services. As a partner of FJY Financial, he has worked with companies of all sizes and from a variety of industries to design retirement plans that meet the companies’ goals and maximize their employees’ probability of achieving financial independence. As a fiduciary advisor, he helps employer navigate the complexity of sponsoring retirement plans and gain and understanding of their fiduciary responsibilities.
Retirement Plans
Traditional 401(k) is a basic retirement benefit for employees. Can be designed with flexible features, such as eligibility, vesting, participant loans, and distribution options. With proper plan design, they can reduce costs by helping companies recruit and retain employees.
Features and Benefits
- Pre-tax and/or Roth Contributions
- Discretionary Employer Contributions
- Up to 1 Year Eligibility
- Auto Enrollment Option
- Vesting Schedules
Contribution Limits
- $19,000 Salary Deferral Limit
- $6,000 Catch-up Contribution
- Total Contributions of $56,000
- Total Contributions of $62,000 if Age 50+
- 25% Tax Deduction Limit
Safe Harbor 401(k) is a great plan for owners and highly compensated employees wanting to maximize contributions and avoid refunds from a failed testing.
Features and Benefits
- Same as Traditional 401k Plans
- Not Subject to ADP Testing
- Fully-Vested Employer Contributions
- 3% Profit Sharing Contribution, or
- 4% Matching Contribution
Contribution Limits
- $19,000 Salary Deferral Limit
- $6,000 Catch-Up Contribution if Age 50+
- Total Contributions of $56,000
- Total Contributions of $62,000 if Age 50+
- 25% Tax Deduction Limit
Profit Sharing Plans differ from 401(k) Plans in that all contributions are made by the employer. Contributions are allocated to participants in proportion to salary. Can be a stand-alone plan or combined with 401k.
Features and Benefits
- Discretionary Employer Contributions
- Vesting Schedules
- Low Setup / Administration Costs
Contribution Limits
- $56,000
- 25% Tax Deduction Limit
- Higher if part of 401(k) plan
New Comparability Plans are a type of Profit Sharing plan that allows businesses to make targeted contributions to owners, highly compensated employees, or select employee groups. Can be stand-alone plan design or combined with 401k.
Features and Benefits
- Maximizes Contribution for Owners/HCEs
- Contributions Targeted to Specified Employees
- Reduce Funding Costs for Employees
Contribution Limits
- $56,000
- 25% Tax Deduction Limit
- Higher if part of 401(k) plan
Cash Balance Plans are a hybrid plan design often adopted by employers and business owners seeking to fund much higher contributions than allowed in 401(k) and Profit Sharing plans. It can be a powerful vehicle to accelerate retirement savings while producing significant tax savings on current income.
Features and Benefits
- Much Larger Contributions
- Often Paired with 410k Plan/Profit Sharing
Contribution Limits
- $225,000 Annual Benefit
Defined Benefit Plans allow employers to assure employees of their retirement income by defining the benefit at retirement age. To fulfill the benefit (or promise to pay at retirement), these plans require annual contributions determined by an actuary. Defined Benefit Plans can sometimes allow employers to fund much larger contributions than 401(k) and other defined contribution plans.
Features and Benefits
- Funding Limits Similar to Cash Balance
- Guaranteed Retirement Benefit for Employees
- Employer Bears Funding Liability for Benefit
- Employer Bears Risk for Investment Losses
Contribution Limits
- $225,000 Annual Benefit
Multiple Employer Plans are a simple structure and a cost effective option for small to medium-sized companies that lack the expertise and personnel capacity to manage their own retirement plan.
- Pools the resources among different companies
- Smallest enterprise can offer employees 401(k) plans on par with big companies
- Employer is completely removed from the vast majority of responsibility and liability
Evaluate Your Plan
Not sure whether your 401k plan is competitive? We can provide a comparative assessment of costs, investment options, and service provided.
FAQs about 401k Plan Design
Are you among the 61% of employers that offer a 401(k) plan to attract and retain top talent? As your company’s plan administrator or HR contact, you know from the level of interest shown...