Business Banking - Retirement Services
401(k) Plans with Traditional Safe Harbor Provisions
|What it is:||A retirement plan that accepts employee contributions. Traditional, tax-deferred 401(k) contributions are made before income taxes are applied, and earnings and contributions are not taxable until withdrawn. Roth 401(k) contributions are made with after-tax dollars, but withdrawals, including earnings, are tax-free if certain conditions are met. Many companies encourage participation in the plan by matching employee contributions.|
|Maximum total plan contribution that the employer may deduct||25% of total eligible payroll (maximum eligible pay per participant is $245,000) plus the amount of elective deferrals contributed|
|Maximum annual allocation to participant’s account||100% of participant’s total pay or $49,000,1 whichever is less|
|Maximum annual participant deferral (cannot exceed 100% of pay)||Up to $16,500;2 catch-up contribution of $5,500 if age 50 or older. Annual participant deferral can be before-tax, Roth after-tax or both, depending on plan terms.|
|Required employer contribution||One of the following:
1 The DC annual additions limit is effective for limitation years ending in the calendar year. The dollar limit is increased by the amount of the applicable catch-up contribution.
2 Salary deferrals into other qualified retirement plans count toward the $16,500 personal annual maximum contribution amount.
3 Basic match: 100% of participant contributions up to 3% of pay, plus 50% of participant contributions up to the next 2% of pay.
4 Enhanced match: 100% of participant contributions, but not less than 4% of pay or more than 6%; or A% of participant contributions up to the first B% of pay, plus C% of participant contributions up to the next D% of pay (C% may not be greater than A% and the sum of B% plus D% may not be greater than 6%).
5 Nonelective contribution: 3% of pay for all eligible employees, including those who do not contribute.
Investment products are not deposits or obligations of, or guaranteed by Lake City Bank or any other bank, are not insured or guaranteed by the FDIC or any governmental agency and are subject to investment risks, including possible loss of principal invested. Past performance is not a guarantee of future results.