[topic 1]

Two Levels of Customization Are Available

We offer two lines of 401k plans to be run via Web 401k:

-- Our Economy 401k is designed for budget-conscious companies that want ultra simple plan management (yet still an attractive 401k).

-- Our Elite 401k offers additional investment flexibility, additional plan design flexibility, unlimited free live technical support, and more.

-- Both products are covered by a 15-day money-back guarantee.

-- Pricing for both products is based on plan size. Special one-person-plan pricing is available for both products. Visit our Pricing page for complete price lists.

-- Pricing for both products is based on plan size. Special one-person-plan pricing is available for both products. Visit our Pricing page for complete price lists.

See below for the exact customization options available with our Economy 401k and Elite 401k.

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[topic 2]

Customization Options: Economy vs. Elite

We've been in the 401k business almost as long as 401k plans have been around. We know what works, what works well, and what's most important to a 401k plan's health and popularity.

Our Economy 401k reflects what small businesses most often seek in a 401k plan:

(1) Affordability, first and foremost
(2) Investment flexibility
(3) Convenient rewards for employee loyalty

Our Elite 401k has the same design principals but allows a little affordability to be sacrificed in the interest of heightened investment and perks flexibility.

The chart below outlines the key customization options available in our Economy and Elite 401ks. All options are included in the price of the 401k (see our Pricing page) unless otherwise noted.

For the One-Person Plan Customization Options click here  

-- Free help is available with understanding each customization option and determining which are most pertinent to your company's needs. Simply contact us with your questions; better yet, complete the appropriate Order Form with the "Unsure. Please contact..." button checked for any item about which you'd like more information. (Your order form answers give us the specifics we need to provide you with a well-informed answer, yet completing an order form costs you nothing and puts you under no obligation to purchase anything.)

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[topic 3]

Our IRS-Approved Prototype 401k Plan

The customization options outlined above are all part of our IRS-approved prototype 401k plan that we work with you to customize to your 401k needs. You're never faced with some cookie-cutter 401k plan and take-it-or-leave it investments like with some 401ks designed for small businesses.

We offer free help with understanding each of your 401k plan customization options, so you can make educated decisions as to what will be best for your company and its employees.

-- For help with specific topics, complete the appropriate Order Form and mark "Unsure. Please contact..." for any items you'd like assistance with. Completing an order form costs you nothing and IN NO WAY obligates you to purchase anything; it simply gives us the information we need about your company's size, etc., to answer questions regarding your potential 401k plan.

-- Within parameters set by law, you can have us edit your 401k plan down the road, too. You're never locked into the decisions you find suitable today. (If edits you later have us make to your 401k plan mean re-customization of your 401k plan administration software and/or amendment of your official 401k Plan Adoption Agreement, we reserve the right to charge a fee to cover our costs.)

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[topic 4]

The Safe Harbor Method of 401k Plan Operation

401k compliance tests are designed to ensure 401k plans have at least a threshold balance of participation of rank-and-file employees in relation to highly-paid employees.

The IRS offers an alternative means for achieving 401k plan balance: The safe harbor method of 401k plan operation lets 401k plans skip their annual 401k discrimination testing so long as the sponsoring employer meets certain employer 401k contribution requirements (designed to ensure broad participation in the company plan) and provides 100% immediate vesting of the contributions. This option is only available within our Elite 401k plans, not our Economy 401k plans (see Options Chart, above).

-- To qualify a 401k plan as a safe harbor plan, the employer must make matching contributions that fulfill the below requirements or make nonelective contributions equal to 3% of each eligible employee's compensation. (See our 401k Basics page if you're unfamiliar with these terms.)

-- Nonelective contributions are made to all eligible employees, regardless of if the employees participate in the company 401k plan. Matching contributions, on the other hand, being based upon salary deferral amounts, are made only to active 401k participants' accounts.

-- If the employer chooses to make safe harbor matching contributions, those contributions must meet two requirements: First, each non-highly-compensated employee must receive a dollar-for-dollar match on salary deferrals up to 3% of compensation and a 50¢ to the dollar match on salary deferrals from 3% to 5% of compensation. Second, the rate of any matching contributions being made to highly compensated employees cannot exceed that being made to non-highly compensated employees.

The employer must provide annual information to employees explaining the 401k plan's safe harbor provisions and benefits, including that safe harbor contributions cannot be distributed before termination of employment and that they are not eligible for financial hardship withdrawal.

Your Web 401k system includes such notification within your customized 401k plan's Summary Plan Description, a document for prospective and active plan participants that's updated at least annually.

-- If you don't choose the safe harbor method of 401k plan administration, we encourage you to use your customized Web 401k's point-and-click compliance testing every month to keep well apprised of your plan's health so there are no surprises when your plan is subjected to its mandatory year-end tests.

-- Monthly testing takes only seconds with Web 401k; frequent testing means you can spot and correct undesirable trends before they compound.

-- Test your company’s 401k plan for compliance at any hour of the day or night, and day of the week, from any computer with Internet access --- that’s total 401k compliance control and oversight!

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[topic 5]

Customization Options for your 401k plan and self-service plan management.

As the name suggests, a Roth 401(k) combines features of the traditional 401(k) with those of the Roth IRA. It's offered by employers like a regular 401(k) plan, but as with a Roth IRA, contributions are made with after-tax dollars. Participants don't get an upfront tax-deduction, the account grows tax-free, and withdrawals taken during retirement aren't subject to income tax, provided you're at least 59 1/2 and you've held the account for five years or more.

The Roth 401(k) can offer advantages to high-income individuals who haven't been able to contribute to a Roth IRA because of the income restrictions. (Eligibility for 2009 phases out between $105,000 and $120,000 for single filers and $166,000 to $176,000 for those who are married and file jointly).

Roth 401(k) accounts are subject to the contribution limits of regular 401(k)s — $16,500 for 2009, or $22,000 for those 50 or older by the end of the year — allowing individuals to stock away thousands of dollars more in tax-free retirement income than they would through a Roth IRA. (In 2009, Roth IRA contributions are limited to $5,000 a year, or $6,000 for those 50 or older.)

The hitch: Those limits apply to contributions to both types of 401(k) plans, so participants can't save $16,500 in a regular 401(k) and another $16,500 in a Roth 401(k). Employees who are offered this option face a difficult choice: Contribute to a Roth 401(k) and suffer a cut in take-home pay (since contributions are made with after-tax dollars), or stick with a traditional 401(k) and hope that in retirement, their tax rate will be lower than it is now. Alternatively, they could hedge their bets by contributing to both accounts.

If the employee expects tax rates to be the same or higher in retirement than it is now, he or she might be better off with a Roth 401(k). This is likely to be the case with young people who are just starting their careers and expect their income to increase in the future. If the employee is in peak earning and anticipates his or her tax bracket will be lower in retirement, then continuing to use a traditional 401(k) is probably the best option. In reality, of course, things are much more complicated. For one, no one can predict with certainty what tax rates will be in the future, though the general consensus is that they're likely to rise to help the government offset growing budget deficits and pay for Social Security and Medicare. 

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