Small Business Retirement Plans

 SIMPLE IRASEP IRA403(b)
May Be Suitable For
 
  • Employers with 100 or fewer employees seeking an alternative to a 401(k) plan with fewer administrative requirements
  • Self-employed individuals with modest incomes
  • Employers who have not sponsored a different retirement plan during the calendar year
  • Self-employed individuals or small employers seeking an alternative to a 401(k) plan and the flexibility to change contributions annually
  • Employees of public schools, certain tax-exempt organizations, universities, colleges, hospitals and churches
Features
 
  • Pre-tax contributions may reduce employee's current taxable income
  • Earnings accumulate tax deferred
  • Nondiscrimination testing not required and no participation requirements
  • Low administrative cost
  • Minimal IRS filings and paperwork
  • Employees are immediately 100% vested in contributions made to their account
  • Easy for employers to establish and maintain
  • Earnings accumulate tax deferred
  • Nondiscrimination testing not required and no participation requirements
  • Low administrative cost
  • Minimal IRS filings and paperwork
  • Employer has flexibility to vary the contribution rate annually
  • Employer is not committed to contributions for any future years
  • Employees are immediately 100% vested in contributions made to their account
  • Easy for employers to establish and maintain
  • Pre-tax contributions may reduce employee’s current taxable income
  • Earnings accumulate tax deferred
  • Employer may make matching or discretionary contributions
  • Flexibility in plan design
Fees
 
  • $15 annual maintenance fee paid by the participant; $10 fee if the participant's total balance is $50,000 or more
  • No maintenance or administrative fees paid by employer
  • $15 annual maintenance fee paid by the participant; $10 fee if the participant's total balance is $50,000 or more
  • No maintenance or administrative fees paid by employer
  • $35 annual maintenance fee paid by participants; $30 fee if total balance is $50,000 or more
  • No maintenance or administrative fees paid by employer
Funding
 
  • Salary deferral and employer-funded contributions
  • Employer-funded contributions only
  • Salary deferral contributions
Plan Contribution Limits
 
  • $12,500 annual deferral limit in 2016 and 2017
  • Employer must match deferrals dollar for dollar up to 3% of compensation (can be lowered to 1% in 2 out of 5 years), OR employer can make a 2% (of compensation) contribution for each eligible employee
  • Additional annual catch-up contribution of $3,000 in 2016 and 2017 for investors age 50 and older
  • Up to 25% of total eligible payroll but not more than $53,000 per participant for tax years 2016 and $54,000 for 2017
  • All eligible employees must receive the same percentage contribution; no discrimination is allowed
  • $18,000 annual deferral limit in 2016 and 2017
  • Additional catch-up contribution of $6,000 for investors age 50 and older in 2016 and 2017
  • Participants who have been with their employer for at least 15 years may be able to defer up to $3,000 more ($15,000 lifetime cap)
  • Total contributions per participant cannot exceed $53,000 for tax years 2016 and $54,000 for 2017
  • If the participant is 50 or older, total contributions per participant cannot exceed $59,000 in 2016 and $60,000 in 2017
Deadline to Set Up/ Contribute
 
  • New plans must be established between January 1 and October 1
  • 60-day notice must be given to all eligible employees
  • Employer contributions must be made by employer's tax-filing deadline plus extensions
  • Employer’s tax-filing deadline plus extensions
  • Plan must be adopted by employer's year-end
  • Salary deferrals made only on a calendar-year basis
  • Employer contributions must be made by employer’s tax-filing deadline, plus extensions
  • SIMPLE IRA plans must be established between January 1 and October 1 (a new employer that comes into existence after October 1 may establish a SIMPLE IRA as soon as administratively feasible after coming into existence).

    1. Complete and sign the SIMPLE IRA Employer Agreement (IRS Form 5304-SIMPLE).
    2. Complete and sign the eContributions Services Application and New User Request form to set up electronic delivery of payroll contribution instructions.
    3. Inform employees that a Franklin Templeton SIMPLE IRA has been established and provide them with a SIMPLE IRA Employee’s Guide, SIMPLE/SEP IRA Forms booklet and a copy of the completed SIMPLE IRA Employer Agreement 60 days prior to becoming eligible to participate in the plan. 

      Note: SIMPLE IRAs must be adopted by October 1 of the first plan year (unless the plan is for a new employer that came into existence after October 1).
    4. After reviewing fund prospectuses, employees must complete a SIMPLE/SEP IRA Application and Transfer Request form (if applicable), as well as a Salary Reduction Agreement.

    Send copies of the completed SIMPLE IRA Employer Agreement, eContributions Services Application and New User Request form and all employee SIMPLE/SEP IRA applications to Franklin Templeton, along with instructions for allocating contributions to each participant account.

  • Employers should follow the steps below to set up Franklin Templeton SEP IRA plans. Plan must be adopted by the employer’s year-end and established by the employer’s tax-filing deadline plus extensions.

    1. Complete, sign and retain the original SEP IRA Employer Agreement (IRS Form 5305-SEP). It does not need to be filed with the IRS.
    2. Complete and sign the eContributions Services Application and New User Request form to set up electronic delivery of payroll contribution instructions.
    3. Provide copies of the completed SEP IRA Employer Agreement and SIMPLE/SEP IRA Forms booklet to all employees.
    4. After reviewing fund prospectuses, employees must complete a SIMPLE/SEP IRA Application and Transfer Request form (if applicable).

    Send copies of the completed eContributions Services Application and New User Request form and all completed employee SIMPLE/SEP IRA applications to Franklin Templeton, along with instructions for allocating contributions to each participant account.

  • Employees should follow the steps below to set up a Franklin Templeton Non-ERISA 403(b) plan. There is no deadline for establishing a plan.

    1. Employees must verify with their employer that Franklin Templeton Bank & Trust is an approved 403(b) account provider.
    2. After reviewing fund prospectuses, employees must complete a  Franklin Templeton Non-ERISA 403(b) Plan application.
    3. Send copies of the completed Franklin Templeton Non-ERISA 403(b) Account employee application to Franklin Templeton, along with fund allocation instructions for future contributions.
    4. Contact the employer to initiate salary deferral contributions to the account via eContributions.

Mailing Address for Plan Applications and Form

Send completed plan documents to Franklin Templeton at the applicable address below.

West CoastEast Coast
Regular Mail
P.O. Box 997153
Sacramento, CA 95899-7153
Regular Mail
P.O. Box 33033
St. Petersburg, FL 33733-8033
Overnight Mail
3344 Quality Drive
Rancho Cordova, CA 95670-7313
Overnight Mail
100 Fountain Parkway
St. Petersburg, FL 33716-1205

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