Self-Directed 401(k) Plan Design

In designing a Self-Directed 401(k) retirement plan, your organization's primary objectives are taken into consideration to tailor a Self-Directed 401(k) plan that includes all tax benefits for your franchise or independent business. The design phase includes informal discussions to identify specific needs and requirements, budgeting restraints, and basic provisions. Tenet Financial Group can customize a Self-Directed 401(k) plan, using prototypes we have developed for easier facilitation, or amend a pre-existing plan. The following steps are taken in designing a Self-Directed 401(k) Plan:

• Overview of your organization's history, type of business, management objectives, personnel policies, employee termination or turnover experiences, and any human resource factors that might affect the plan;
• Interpretation of employee information (provided by your organization) to determine benefits and contributions under different plan strategies;
• Review of allocations using various formulas and benefit projections for defined contribution plans;
• Determination of government compliance of the plan (if customized);
• Design of plan specifications such as eligibility, vesting options, benefit or allocation formula, retirement dates, and distribution methods.

Self-Directed 401(k) Plan Installation

Before you implement a new or amended Self-Directed 401(k) plan, the plan must be submitted to the Department of Labor (DOL) and the Internal Revenue Service (IRS) for approval (qualification) to assure tax benefits. Tenet Financial Group will handle the complete submission of the plan including the preparation of plan documents, completion of regional plan prototypes, or amendments. The qualification process is necessary to make the plan and trust operative as well as guarantee initial plan approval under the appropriate IRS Code Sections. During Self-Directed 401(k) plan qualification and implementation the following occurs:

• Submittal of a regional plan prototype to your organization's legal and tax advisors for approval and resolution of plan adoption;
• Preparation of IRS qualification and Department of Labor approval documents (Form 5300 Series, Form 5302, Form 2848, Form SS-4);
• Consultation as necessary with the Internal Revenue Service or the Department of Labor;
• Preparation of a Summary Plan Description of major plan provisions for employee distribution.

Self-Directed 401(k) Administration

Tenet Financial Group provides continuous Self-Directed 401(k) administration.  These services include annual administration, determining eligible participants, additional benefits, allocation of contributions, compliance testing, maintenance of plan records, administration reports, and consultation with your accountant, attorney or financial advisor.

Administration reports can be furnished annually, semi-annually or quarterly dependent on request. Administration services may include:

• Calculation of minimum required and maximum tax deductible employer contributions. "Top-Heavy" testing is performed to satisfy compliance for plans that primarily benefit key employees (60% of benefits) and must meet requirements on minimum contributions and accelerated vesting;
• Preparation of Allocation Reports (defined contribution plans). Inclusions consist of summaries and plan financial statement similar to the Valuation Report listed above;
• Determination of minimum participation, coverage, and discrimination testing;
• Preparation of Average Deferral Percentage (ADP) and Average Contribution Percentage (ACP) tests for all 401(k) plans. The ADP and ACP are non-discrimination tests. The amount of contribution for highly compensated employees is limited by the average deferral package contributed by non-highly compensated employees under these test rules;
• Calculation and preparation of the vested balance and necessary disclosure forms for employee status changes (due to retirement, termination, disability, or death) for submittal to the employee. Distribution statements and 1099-R forms will be furnished for benefit distributions;
• Reconciliation of employee census information and plan financial statements;
• Perform an annual compliance review of written plan with actual plan operation goals and objectives.