There are many types of retirement plans that an employer can choose from. Individual plans may vary in structure when considering participation requirements, fund management, the contribution and distribution of funds, tax considerations, and plan fees. Plans may be viewed as either being defined benefit plans, where contributions grow according to a set formula until retirement, or as defined contribution plans, where funds are directed to different investment options until retirement.

United Benefit Solutions can help you analyze your company’s needs, and advise you on implementing a new retirement plan, or help you refine an existing plan. We provide a full market evaluation of your current retirement plan, and record keeping administrative services.

Below are a few examples of some common retirement plans.


Simplified Employee Pension Plan: (SEP): A retirement plan that an employer or self employed individual can establish for his or her business. The SEP is a low cost plan to provide because the employer’s contributions are optional, and tax deductible. The earnings in the plan grow tax deferred until the time of withdrawal. The plan is 100% vested, which means that the individual participating in the plan has complete ownership from he or she’s admittance.

Simple IRA: A retirement plan available to companies with no more than 100 employees. It allows the employer, and employee to make contributions to the plan on an elective or non-elective basis. This means that the employer can elect to match the employee’s contributions up to a specified amount, or choose to participate on a non-elective basis, which would minimize the employer’s contribution to 2% of compensation of the total employees’ contributions in the company. Employer contributions are tax deductible, participants are fully vested, and earnings grow tax deferred until time of withdrawal.

Traditional 401K: A retirement plan that allows employees to contribute pre-tax earnings to the plan, also referred to as elective deferred contributions. The employee may contribute up to $15,500 per tax year if they are under the age of 50, and $20,500 if they are over the age of 50. The funds are held in an account chosen by the employer, usually a “mutual fund”. The employee is allowed to allocate any portion of their contributions to different investment options that are available in the fund, which is in turn directed by a Fund Manager. The employer may also contribute to the account, and that amount may vary from 50% of the employees’ contributions or a set amount chosen by the employer. The contributions grow tax deferred. After the employee reaches the age 59 and a half they will begin to receive “qualified distributions” from the funds in the account, which are then taxed as ordinary income. There are exceptions to the withdrawal of funds from the account before the required age, but the employee should consult a licensed agent or certified tax consultant in order to avoid penalties and tax implications.

Safe Harbor 401K: A retirement plan that combines qualities of the simple IRA and the Traditional 401K, but does not include various administrative plan expenses, IRS reporting, and non-discrimination test requirements. A company may choose to make matching contributions or non-elective contributions to the Safe Harbor 401K plan, and both options must be fully vested.

Profit Sharing Plan: A retirement plan in which the employee receives a percentage of the company’s profits. Contributions are made by the employer, and not the employee. The company designates what portion of the profits will be shared, and there are usually restrictions on the withdrawal of these funds. The employers contributions are tax deductable, and the funds grow tax deferred until withdrawal.