Plan Type Comparison Chart

QUESTION TRADITIONAL 401K SAFE HARBOR 401K PROFIT SHARING CROSS-TESTED PS DEFINED BENEFIT
Who can establish this Plan? Any employer with one
or more employees
Any employer with one
or more employees
Any employer with one
or more employees
Any employer with one
or more employees
Any employer with one
or more employees
When must the Plan be established?
By the end of the fiscal
year-end (12/31 for
calendar year)
By the end of the fiscal
year-end (12/31 for
calendar year)
By the end of the fiscal
year-end (12/31 for
calendar year)
By the end of the fiscal
year-end (12/31 for
calendar year)
By the end of the fiscal
year-end (12/31 for
calendar year)
Are employee contributions mandatory? No. Employees can elect how much to defer pursuant to a salary reduction agreement. No. Employees can elect how much to defer pursuant to a salary reduction agreement. N/A N/A N/A
Are employer contributions mandatory? No. The employer can make discretionary contributions or matching contributions as elected in the Plan.
 Yes. The employer must make a contribution in the form of a safe harbor basic match, a safe harbor enhanced match or a safe harbor non-elective contribution as elected in the Plan.
No. The contribution is discretionary. No. The contribution is discretionary. Yes. The employer makes contributions as required by plan terms, and calculated by an enrolled actuary.
What are the employer
contribution limits?
25% of participating
compensation with the allocations limited to 100% of compensation or $49,000 per participant in 2009.
25% of participating
compensation with the allocations limited to 100% of compensation or $53,000 in 2016.
25% of participating
compensation with the allocations limited to 100% of compensation or $53,000 in 2016.
25% of participating
compensation with the allocations limited to 100% of compensation or $53,000 in 2016.
Based on actuarial assumptions (i.e., age compensation, etc.), $210,000 Annual Benefit Cap in 2016.
What are the employee
contribution limits?
$15,500 in 2008, $16,500 in 2009.   Participants over the age of 50 are eligible to make additional "catch-up" contributions (see FAQ). $18,000 in 2016. Participants over the age of 50 are eligible to make additional "catch-up" contributions (see FAQ).     No employee contributions
What is the funding
responsibility?
Either employee salary
reduction contributions or employer contributions, or both.
Employee salary
reduction contributions and required employer contributions.
Annual employer contribution
is discretionary.
Annual employer contribution
is discretionary.
Funded by employer.
When must contributions be made?
Employee contributions must
be deposited as soon as administratively feasible, generally within 5 days after the payroll date (see Deferral Timing Notice). Employer contributions must be deposited by tax-filing date plus extensions.
Employee contributions must
be deposited as soon as administratively feasible, generally within 5 days after the payroll date (see Deferral Timing Notice). Employer contributions must be deposited by tax-filing date plus extensions.
Employer contributions must be deposited by tax-filing date plus extensions. Employer contributions must be deposited by tax-filing date plus extensions. Employer contributions must be deposited by tax-filing date plus extensions.
What are the eligibility
requirements?
The maximum allowable eligibility requirements that can be imposed are 21 years of age and 1,000 hours of service in a prior year. The employer has the option of reducing these requirements. The maximum allowable eligibility requirements that can be imposed are 21 years of age and 1,000 hours of service in a prior year. The employer has the option of reducing these requirements. The maximum allowable eligibility requirements that can be imposed are 21 years of age and 1,000 hours of service in a prior year. The employer has the option of reducing these requirements. The maximum allowable eligibility requirements that can be imposed are 21 years of age and 1,000 hours of service in a prior year. The employer has the option of reducing these requirements. The maximum allowable eligibility requirements that can be imposed are 21 years of age and 1,000 hours of service in a prior year. The employer has the option of reducing these requirements.
What are the vesting
requirements?
Employee salary deferrals are 100% vested.  Employer contributions may vest over time, typically a graded schedule with full vesting after 6 years.
Employee salary deferrals are 100% vested. Safe harbor contributions also vest immediately. Additional employer contributions can vest over time, typically a graded schedule with full vesting after 6 years. Employer contributions may vest over time, typically a graded schedule with full vesting after 6 years.
Employer contributions may vest over time, typically a graded schedule with full vesting after 6 years.
Employer contributions may vest over time, typically a graded schedule with full vesting after 6 years.
Is the Plan subject to
non-discrimination testing.
Yes, an annual ADP test is
required.  Failure could result in refunds to HCE's or an employer contribution to NHCE's. If a match is provided, an annual ACP test will be required as well.
No annual ADP test required. ACP may not be required. Generally no. Yes. This is a complex plan design and requires discrimination testing under IRC 401(a)(4). An actuary must determine the annual contributions.
Is the Plan subject to
top heavy minimums?
Yes.  If 60% or more of the plan assets are allocated to Key employees, up to a 3% employer contribution is required. Yes.  If 60% or more of the plan assets are allocated to Key employees, up to a 3% employer contribution is required. The employer safe harbor contribution can be used towards satisfying the top heavy minimum. Yes.  If 60% or more of the plan assets are allocated to Key employees, up to a 3% employer contribution is required. Yes.  If 60% or more of the plan assets are allocated to Key employees, up to a 3% employer contribution is required. Yes. If 60% or more of the plan assets are allocated to Key employees, than a contribution shall be made to the non-key employees. This shall be the lesser of 2% multiplied by Plan Years of Service or 20%.
When is an employee eligible to withdraw from the Plan?
Generally, salary deferrals cannot be withdrawn until separation of service, death, disability, or retirement. A plan may allow for hardship distributions.
Generally, salary deferrals cannot be withdrawn until separation of service, death, disability, or retirement. A plan may allow for hardship distributions.
Generally cannot be withdrawn until separation of service, death, disability, or retirement. A plan may allow for hardship distributions.
Generally cannot be withdrawn until separation of service, death, disability, or retirement. A plan may allow for hardship distributions.
Payment of benefits may be made only upon reaching normal retirement age, termination of employment, plan termination, disability or death.