Milberg Consulting LLC Limits & Compliance Information

The chart below illustrates the compliance requirements and limits that apply for the plan types shown. This chart is intended as a guide only. Be mindful that many of the requirements and limits interrelate with each other (e.g., individual maximum annual addition/benefit limitations and employer deduction limit). We suggest that you consult a pension professional before selecting any plan type shown below.

Compliance Requirements & Limits	SEP	SIMPLE IRA	Profit Sharing (PS)	PS w/401(k)	Defined Benefit
Compliance Requirements & Limits	SEP	SIMPLE IRA	Qualified Retirement Plan
Employer Conditions	None	100 Employee Limit	None	None	None
Plan Document	IRS Model Plan (Form 5305-SEP) or Individual Plan	IRS Model Plan (Form 5305-SIMPLE) or Individual Plan	Qualified Plan Document	Qualified Plan Document	Qualified Plan Document
Plan must be established by	Due date of employer tax return or extension	By October 1 of calendar yr exception for new employer	By end of plan year	By end of plan year; Oct.1 if Safe harbor; exception for new employer	By end of plan year
Exclusive Plan	No	Yes	No	No	No
Employees of Affiliated or Related Employers	Must include	Must include	May exclude by applying minimum coverage rules	May exclude by applying minimum coverage rules	May exclude by applying minimum coverage rules
Coverage Testing	Not Applicable	Not Applicable	Applicable	Applicable	Applicable
Nondiscrimination Tests	Not Applicable	Not Applicable	Applicable	Applicable	Not Applicable
Top heavy Rules	Not Applicable	Not Applicable	Applicable	Applicable	Applicable
Individual Maximum Annual Addition & Benefit Limits (IRC§415)	For 2010, lesser of 100% of comp or $49,000	Participant limit plus employer contribution	For 2010, lesser of 100% of comp or $49,000	For 2010, lesser of 100% of comp or $49,000; 401(k) catch-up excluded	For 2010, lesser of 100% of high 3-yr avg. compensation or $195,000
Participant Contribution Limit	N/A	$11,500 plus $2,500 if age >50	N/A	$16,500 plus $5,500 if age >50	N/A
Compensation Dollar Limit	$245,000	$245,000 for Non-elective; None for Match	$245,000	$245,000	$245,000
Employer Deduction Limit (IRC§404)	25% of aggregate employee compensation	Participant limit plus 2% ER Contribution; or 3% ER Match	25% of aggregate employee compensation	25% of aggregate employee compensation; 401(k) not considered	Based on plan formula subject to applicable limits
Participant-Directed Investments	Required	Required	Optional but not required	Optional but not required	Not Permitted
Life Insurance as a Plan Investment	Not Permitted	Not Permitted	Permitted	Permitted	Permitted
Accepts transfer from qualified plan, IRA, SEP, SIMPLE, 403(b), 457(b)	Yes; SIMPLE IRA 25% penalty if distributed before 2 yrs	From another SIMPLE IRA only	Yes; SIMPLE IRA 25% penalty if distributed before 2 years	Yes; SIMPLE IRA 25% penalty if distributed before 2 years	Yes; SIMPLE IRA 25% penalty if distributed before 2 years

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The information provided is intended as a general resource, not as investment or retirement planning, or legal plan compliance advice or counsel. If you consider any actions discussed in this update, we suggest that you consult a qualified planning, tax or ERISA professional. ERISA Expertise LLC and Barry R. Milberg do not warrant and are not responsible for any errors and omissions from this update. Any tax advice included in this written or electronic communication is not intended or written to be used, and it cannot be used, by the taxpayer for the purpose of avoiding any penalties that may be imposed on the taxpayer by any governmental taxing authority or agency.