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the experts.
Every plan brings up questions. Our experts give you the answers - clear, specific, and built on decades of experience. Everything you need to create the most suitable plan for your team and keep it on track.
Speak to
the experts.
Every plan brings up questions. Our experts give you the answers - clear, specific, and built on decades of experience. Everything you need to create the most suitable plan for your team and keep it on track.
Knowledge Base.
Use the tickers to guide your thinking, then explore the Knowledge Base to build it out. Each piece gives you something practical you can use straight away. And if you hit a wall or just want to sense-check an idea, an adviser’s always here to help.
1. Understanding your plan.
2. Running it better.
3. Planning ahead.
Knowledge Base search.
SECURE 2.0 Catch-Up Contributions – Part 2: Mandatory Roth Catch-Up
SECURE 2.0 Catch-Up Contributions – Part 2: Mandatory Roth Catch-Up Contributions Coming in 2026 This post is Part 2 of
SECURE 2.0 Catch-Up Contributions – Part 1: Super Catch-Up
SECURE 2.0 Catch-Up Contributions – Part 1: New Super Catch-Up Boosts Limits for Ages 60–63 SECURE 2.0 introduced two big
Long Term Part-Time Employee Rules
Long Term Part-Time Employees: What to Know About New Eligibility Rules You may have noticed a theme emerging in recent
SECURE 2.0 Tax Credits to Expand Retirement Plan Access
Expanding Retirement Plan Access: How SECURE 2.0 Tax Credits Help More Americans Save One of the most effective ways to
Speak to us.
Behind every answer is a team that’s done this a thousand times before. Ask ERISA connects you directly to the right specialist - whether that’s administration, recordkeeping, or actuarial support. Book a call and get the help you need.
Richard Phillips, EA, AIFA, CPC, CPFA, QPA, QKA - Senior ERISA Consultant
Richard is a seasoned ERISA consultant with over three decades of experience, is an Enrolled Agent (EA), admitted to represent clients before the IRS on any tax matter, an Accredited Investment Fiduciary Analyst (AIFA), Certified Pension Consultant (CPC), Certified Plan Fiduciary Advisor (CPFA), Qualified Pension Administrator (QPA), and Qualified 401(k) Administrator (QKA). He’s also co-chair of the American Society of Pension Professionals and Actuaries Government Affairs Department of Labor sub-committee and has represented clients in DOL audits.
If you'd like to walk it through,book a quick call with Richard and get straight answers from the source.
Dakota Morrison, MBA, QKC, CPFA, QKA - ERISA Consultant
Dakota holds a Masters in Business Administration (MBA), and is a Qualified 401(k) Consultant (QKC) and a Certified Plan Fiduciary Advisor (CPFA). He’s known internally as the Recordkeeping Wizard for designing systems and processes for payroll providers and recordkeepers. He’s an experienced ERISA consultant and Client Relationship Manager helping clients achieve their goals efficiently.
Justin Bonestroo, MSEA, EA, CPC, CPFA - Actuary & Senior ERISA Consultant
Justin is an Enrolled Actuary (EA), a Certified Pension Consultant (CPC), a Certified Plan Fiduciary Advisor (CPFA) and a senior level ERISA consultant. He has served as the past president of the American Society of Pension Professionals (ASPPA) and the American Society of Enrolled Actuaries (ASEA). He’s a published author focused on retirement readiness for employers and employees.
Ryan Bogle, MBA, QKC, CPFA, QKA - ERISA Consultant
Ryan holds a Masters in Business Administration (MBA), and is a Qualified 401(k) Consultant (QKC) and a Certified Plan Fiduciary Advisor (CPFA). He joined Erisa Consultants as a trust accountant but quickly advanced to become a trusted ERISA consultant and Client Relationship Manager. He’s an excellent resource, helping clients navigate the nuances of ERISA.
Dakota Morrison, MBA, QKC, CPFA, QKA - ERISA Consultant
Dakota holds a Masters in Business Administration (MBA), and is a Qualified 401(k) Consultant (QKC) and a Certified Plan Fiduciary Advisor (CPFA). He’s known internally as the Recordkeeping Wizard for designing systems and processes for payroll providers and recordkeepers. He’s an experienced ERISA consultant and Client Relationship Manager helping clients achieve their goals efficiently.
Justin Bonestroo, MSEA, EA, CPC, CPFA - Actuary & Senior ERISA Consultant
Justin is an Enrolled Actuary (EA), a Certified Pension Consultant (CPC), a Certified Plan Fiduciary Advisor (CPFA) and a senior level ERISA consultant. He has served as the past president of the American Society of Pension Professionals (ASPPA) and the American Society of Enrolled Actuaries (ASEA). He’s a published author focused on retirement readiness for employers and employees.
Want to speak with Justin? Book a quick call to explore how his expertise can strengthen your clients’ outcomes.
Ryan Bogle, MBA, QKC, CPFA, QKA - ERISA Consultant
Ryan holds a Masters in Business Administration (MBA), and is a Qualified 401(k) Consultant (QKC) and a Certified Plan Fiduciary Advisor (CPFA). He joined Erisa Consultants as a trust accountant but quickly advanced to become a trusted ERISA consultant and Client Relationship Manager. He’s an excellent resource, helping clients navigate the nuances of ERISA.
Want to speak with Justin? Book a quick call to explore how his expertise can strengthen your clients’ outcomes.
Knowledge base
SECURE 2.0 Catch-Up Contributions – Part 2: Mandatory Roth Catch-Up
SECURE 2.0 Catch-Up Contributions – Part 2: Mandatory Roth Catch-Up Contributions Coming in 2026 This post is Part 2 of
SECURE 2.0 Catch-Up Contributions – Part 1: Super Catch-Up
SECURE 2.0 Catch-Up Contributions – Part 1: New Super Catch-Up Boosts Limits for Ages 60–63 SECURE 2.0 introduced two big
Long Term Part-Time Employee Rules
Long Term Part-Time Employees: What to Know About New Eligibility Rules You may have noticed a theme emerging in recent
SECURE 2.0 Tax Credits to Expand Retirement Plan Access
Expanding Retirement Plan Access: How SECURE 2.0 Tax Credits Help More Americans Save One of the most effective ways to
Plan Basics 101
This guide walks you through the basics of a workplace retirement plan. What it is. How the money flows. Who’s responsible for running it. And the rules that keep it fair. It’s everything you need to get a clear start, without the jargon.
The Plan
Helping business owners, advisors, and CPAs understand the core components of workplace retirement plans.
A workplace retirement plan is a tool for helping employees save for their future. It provides tax advantages, a structure for saving and investing, and (often) employer contributions. These plans help attract talent, reduce tax burdens, and improve long-term financial wellness.
- 401(k): Employee-driven savings with employer match options
- Profit Sharing: Employer contributes discretionary amounts
- Cash Balance: A defined benefit plan that looks like a 401(k) but has pension-style funding
Eligibility: The rules for who can join and when. Often age 21 + 1 year of service. (Some plans now include Long-Term Part-Time (LTPT) workers after 2–3 years.)
Entry Date: The specific date an eligible employee can begin participating. Usually monthly or quarterly.
Auto Enrollment: Automatically enrolls employees unless they opt out. It boosts participation and can help meet Safe Harbor or QACA rules.
Employee Deferrals: The portion of pay employees choose to contribute.
Employer Contributions:
Match: Based on what the employee defers
Profit Sharing: Discretionary employer contribution
Money Types: Each source of money has its own name and rules (e.g., deferrals, Roth, match, rollover).
Catch-Up Contributions: Extra savings allowed for employees age 50+.
Visual: A pie chart showing the sources of money going into a participant account.
Nondiscrimination Testing: Ensures the plan doesn’t favor highly paid employees. Two big ones:
ADP: deferrals
ACP: match/after-tax
Safe Harbor: A plan design that avoids this testing by making required employer contributions.
Highly Compensated Employees (HCEs): Earned more than $155,000 (2024) or own >5% of the company.
Key Employees: Important for top-heavy testing. Often owners or officers with high comp.
Top Heavy: When >60% of plan assets belong to key employees. May require minimum contributions for others.
Visual: Flowchart of testing → pass/fail → consequences.
Plan Year: The 12-month cycle the plan uses for administration. Often the calendar year.
Vesting: How much of the employer money an employee “owns.” Deferrals are always 100% vested; employer funds may have a vesting schedule.
Normal Retirement Age (NRA): The plan’s defined retirement age (often 65) that triggers full benefits and vesting.
Plan Sponsor: The employer who sets up and maintains the plan.
TPA (Third Party Administrator): Handles testing, documents, and plan operations. That’s us.
Record Keeper: Tracks individual account balances, investments, and transactions.
Fiduciaries:
3(16): Admin duties (e.g., approving distributions)
3(21): Investment advisor, shares responsibility
3(38): Investment manager, full discretion
Visual: Org chart showing who does what.
Loans: Borrow from yourself, pay it back with interest.
Distributions: Withdrawals at retirement, termination, death, or disability. Taxable unless Roth-qualified.
RMDs: Required Minimum Distributions starting at age 73 (or 75 for those born in 1960 or later).
Force-Outs: Accounts under $5,000 may be distributed to former employees who don’t respond.
Plan Setup & Design Basics
The legal blueprint for your retirement plan. It dictates how the plan works—eligibility, contributions, distributions, and more. If it’s not in here, it doesn’t count. Period.
The 12-month period used for administration and compliance testing. Often aligns with the calendar year—but it doesn’t have to.
The specific date(s) on which eligible employees can begin participating. Usually the first day of the month or quarter after meeting eligibility.
The rules defining who can join the plan and when. Common default: age 21 and 1 year of service, but SECURE 2.0 has made it more flexible—and more complex.
The age (typically 65) when a participant is considered “retirement-eligible” under the plan. Impacts vesting and required distributions.
Refers to the source of funds in an account: employee deferrals, employer match, profit sharing, Roth contributions, and rollovers. Each has unique rules and treatment.
How employer contributions are divided among eligible employees. Based on pay, flat amounts, or sometimes age-weighted magic.
Contributions from the company that match a portion of employee deferrals. A popular incentive—and tax deduction.
A discretionary employer contribution. Can be uniform or skewed to favor specific groups (legally).
A profit sharing formula that allows different groups to get different percentages—great for favoring older/higher-paid staff without flunking compliance.
Extra deferrals allowed for participants age 50 or older. Because the IRS knows you’ve got some catching up to do.
Contributions made after-tax, with qualified withdrawals tax-free. Good for younger savers and those expecting higher taxes later.
Non-Roth, post-tax contributions. Rare, but useful for “mega backdoor Roth” strategies if the plan allows.
Compliance & Testing
The rule that a plan can’t favor highly paid employees too much. Ensures fairness—and keeps Uncle Sam happy.
Annual tests to make sure HCEs don’t defer or get matched at rates too much higher than non-HCEs:
ADP = Actual Deferral %
ACP = Actual Contribution %
A plan design that skips ADP/ACP testing by promising certain employer contributions and participant notices. Testing headache = gone.
Makes sure enough non-HCEs are covered by the plan. It’s the “who’s in and who’s not” test.
When multiple businesses are considered one employer under IRS rules. Common with family-owned or related companies. Plan coordination required.
Businesses that work closely together and are treated as a single employer. More nuance, more complexity, same result: coordinate your plans.
Combining multiple plans for testing purposes—typically to help pass nondiscrimination or top-heavy tests.
Occurs when key employees hold more than 60% of plan assets. If triggered, non-key employees must receive minimum contributions.
Defined by IRS: owners, officers with high comp, or certain high-earning staff. Not just “important people”—it’s a legal label.
Employees who earned over a certain amount (e.g., $155,000 in 2024) or own more than 5% of the business. They trigger special testing requirements.
Employees that can legally be left out of testing—for now—such as under age 21 or with less than 1 year of service.
Operations & Administration
That’s us. We keep the gears turning—handling compliance, documents, testing, and consulting. Not just form-fillers—we’re your plan’s strategic partner.
The technology platform that tracks individual account balances, investments, and transactions. Think “TurboTax for retirement plans”—without the deductions.
Employee and payroll info needed to administer the plan. If it’s wrong, everything downstream will be too.
The annual return/report filed with the IRS and DOL. Tells the government what’s going on in the plan each year.
The date when plan assets and liabilities are measured. Critical for DB and CB plans.
3(16): Handles plan operations. Can reduce employer liability.
3(21): Offers investment advice. Shares fiduciary duty with employer.
3(38): Manages plan investments. Takes full investment responsibility.
Fiduciaries must act in the best interest of participants. No exceptions.
Employee Participation & Transactions
Distributions & Defaults
Participants can borrow from their own account and repay themselves with interest. Sounds great—until someone misses a payment and it becomes taxable.
Withdrawals from the plan, typically allowed at retirement, termination, disability, or death. Taxable unless qualified (like Roth).
Small balances (under $5,000) can be distributed or rolled into an IRA if the participant ghosts after leaving the company.
Participants must begin taking distributions at age 73 (or 75, depending on birth year). Uncle Sam wants his tax revenue.
Automatically enrolls eligible employees unless they opt out. Boosts participation—and may satisfy certain Safe Harbor requirements.
The default investment option for employees who don’t choose one. Must be “prudent” to protect the plan fiduciaries.
Cash Balance & Defined Benefit Plans
A type of DB plan that feels like a 401(k): participants see a hypothetical account, but the plan has traditional pension obligations under the hood.
Old-school pensions. Provide a specific benefit at retirement based on salary and service. Great for long-term savings—if you can stomach the complexity.
The amount of benefit a participant has earned so far in a DB plan. Think of it as a pension balance, not always visible to the employee.
The interest rates, mortality tables, and other data used to calculate benefits and contributions in DB and CB plans.
The present value of future DB plan benefits. Used to determine how much the employer needs to contribute.
Trending Concepts
Employees working 500+ hours for 2–3 consecutive years must be allowed to defer—even if they’re still part-time. Thanks, SECURE 1.0 & 2.0.
Assets leaving the plan early via loans, withdrawals, or cash-outs. It erodes participant outcomes and hurts long-term savings goals.
A measure of whether a participant is on track to retire with sufficient income. The end goal of all these moving parts.
The real metric of plan success: are employees actually able to retire comfortably? Not just compliance—results matter.
Programs that help employees improve budgeting, debt, and savings behaviors. A growing trend to support better outcomes and reduce plan leakage.