In the retirement industry, we throw around several vernaculars that are foreign to the normal...
Pooled Employer Plan vs. State Mandated IRA
| Trait | Castle Rock PEP | State IRA |
|
Investment Options |
Professionally Managed |
Government Selected |
|
Employer Match |
Employer Option |
None! |
|
2024 Employee Contribution Limits |
$23,000 |
$7,000 |
|
Pretax and Roth Contributions |
Both Pretax and Roth |
Roth |
|
Annual Limit Employee + Employer |
$69,000 |
$7,000 |
|
Age 50+ Catch-up Contribution |
$7,500 |
$1,000 |
|
Employer Contribution Tax Credits |
None! |
|
|
Plan Costs as Business Deductions |
Your Choice |
None! |
Enjoy SECURE 2.0 Tax Credits
The tax credits below are available to companies with 50 or fewer employees and no prior retirement savings plan.
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$500 for three years
To add automatic enrollment plan provision.
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$250 for startup costs in first three years
Per eligible non-highly compensated employee up to $5,000 each year.
-
$1,000 per employee
For employer contribution to participants earning up to $100,000. Gradually reduces over five years. See IRS Form 8881.
Avoid state mandated retirement plans and fines
As of January 2024, 10 of the 19 state programs (8 auto-IRA – CA, CO, CT, IL, MD, ME, OR, and VA) and 2 others – MA (MEP) and WA (Marketplace) are open to all eligible employers and workers. Source: https://cri.georgetown.edu/states/
Did you receive a letter from your state?
PEP Benefits
Just a few of the benefits of pooled employer plans...
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Scalable for micro plans
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Individual plan design
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Reduced fiduciary risk
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Zero audit fee
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Outsource trustee role
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One Form 5500
Do you live in an auto-IRA program state? As of June 30, 2024, 17 states established auto-IRA...