Meet Jason, Engineer
With 274 employees, Jason knew he needed a strong benefits package to attract and retain top local talent in his home state of California. Paired with his desire to minimize annual tax liabilities for the business and a looming state mandated retirement savings vehicle on the horizon, Jason knew a 401(k) plan made the most sense for his business’s needs.
Jason is well-prepared for his future retirement, thanks in part to his successful engineering business and in part to his diligent saving over the years. Ultimately, he wanted his employees to be able to save the same. He worked with a trusted financial advisor since he started his firm 16 years ago and has his assets diversified throughout several accounts—his 401(k) being his largest.
His advisor provides onsite meetings annually with employees and has flexibility in investment selection through CoPilot’s Open Architecture 401(k) plan. Because Jason has a multi-generational staff with several different income brackets, he wanted specific plan design features to accommodate his staff of over 200 employees. Additionally, because he qualifies for an annual audit based on his company size, it’s important that he’s prepared each year for the required testing and audits.
In addition to eligibility requirements and a vesting schedule, he provides an employer match and Integrated Profit Sharing. This profit sharing method allows the flexibility to offer higher contributions for participants whose annual salary exceeds the Taxable Wage Base (TWB). This can help higher earners make up for not receiving social security benefits on those wages when they retire. This plan design feature ultimately benefits highly compensated employees, as every dollar an employee earns above the TWB, the percentage of profit sharing increases accordingly.
High plan participation is also important to Jason so he included an automatic enrollment feature on the plan. When employees becomes eligible to participate, they are automatically enrolled at a 2% contribution rate. They can decide to opt-out or increase their contributions at any time.
Many small business owners can relate to Jason’s goals, attitudes, and challenges when it comes to running his small business while also satisfying retirement state mandates.
Click the + below to learn more about Jason’s small business:
To learn more about choosing the right plan for your small business and explore our CoPilot plan options, check out the Retirement Plans Flowchart tool.
The CoPilot Open Architecture 401(k) is a great fit for this small business because it offers the CoPilot features of Savings Alerts and Years of Retirement calculations for participants, while providing ultimate flexibility in plan setup and investment selection for the plan’s advisor. With access to thousands of investments, the CoPilot Open Architecture can fit any size company’s needs.
Download this resource to learn about differences between traditional 401(k) plans and the CalSavers Roth IRA which was set up as a payroll-deducted auto-IRA plan.
As the plan sponsor, Jason chose which contribution options were best for his plan, for both himself and his employees. Learn more about the discretionary contribution options available as the retirement plan sponsor.
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CoPilot recordkeeping services include Years of Retirement calculations and savings alerts. Services for CoPilot are provided by Plan Administrators, Inc. (PAi), an Ascensus company. The Years of Retirement resource is for illustrative purposes only and is not, in any way, a guarantee of future results. CoPilot Prime is a suite of services provided by Plan Administrators, Inc. and PAi Trust Company, Inc. (PAi), which are Ascensus companies. CoPilot recordkeeping services include Years of Retirement calculations and savings alerts and are provided by PAi. Investment fiduciary services for CoPilot Prime are provided by PAi Trust, which is an affiliated business entity to PAi under common control and ownership interest. Services for CoPilot Prime Pooled Employer Plan are provided by PAi Trust Company, Inc., an Ascensus company. 401(k) plans are: Not FDIC insured | Not bank guaranteed | May lose value CoPilot IRA is a retirement service and is not an independent entity. Services for CoPilot IRA, including Years of Retirement and savings alerts, are provided by and through PAi Trust Company, Inc., an Ascensus company. PAi Trust Company does not provide any tax, legal, or investment advice. Individual Retirement Accounts are: Not FDIC insured | Not bank guaranteed | May lose value |