401(k) Plan Advisors

Safe Harbor 401(k) Required Employee Matching

Eliminates Annual 401(k) Plan Plan Testing Requirement(s) 

The safe harbor 401(k) plan is like a traditional 401(k) plan; however, the main difference is that the employer is required to make fully vested contributions to the plan participants.

Employer matching

The company matches 100% on the first 3% of deferred compensation, plus a 50% match on the next 2% of deferred compensation

Enhanced Match

The company matches 100% of the employee on the first 4% of deferred compensation.

Employer contributions

• 3% or more of the employee’s compensation made on behalf of all eligible employees, regardless of whether they make elective deferrals.

• The safe harbor 401(k) plan is not subject to the complex annual nondiscrimination tests that a traditional 401(k) are subject to since all employees are receiving a safe harbor employer contribution benefit.

• Both the traditional and safe harbor 401(k) plans can be utilized by companies of any size and combined with other retirement plans.

Vendor Benchmarking & Selection

When working with Glover Park Wealth, we help you select the vendor(s) and/or service provider(s) that will work with your company on retirement plan design, payroll, HR, Human Capital Management (HCM) and group health insurance benefits for your company and employees.

• Payroll
• 401(k) Recordkeeping
• Human Resources
• Health Insurance
• Commerical & Business Insurance 

As your corporate group benefits partner, we will ensure multiple quotes from our vendors to ensure your plan is competitive and that the service providers we select provide ongoing support that meets the needs of your organization.

Glover Park Wealth provides ongoing due diligence to ensure our vendor partners have the most competitive industry pricing along with customer support for ongoing maintenance of their corporate group benefits plan.

What is a 401(k) Retirement Plan?

A 401(k) is a defined contribution plan which is offered by employers as an employee benefit. The employee and employer can make contributions into the retirement plan based on the contribution limits set by the Internal Revenue Service (IRS) each year.

The Employee Retirement Income Security Act of 1974 ("ERISA”) outlines all the rules and regulations when it comes to a employee sponsored retirement plan: Employee Retirement Income Security Act (ERISA) | U.S. Department of Labor (dol.gov)

Glover Park Wealth will work with your company and our partners to setup a 401(k) plan that is aligned with the long-term goals and values of your firm.

We have several 401(k) custodian partners that we work with to make sure we design a 401(k) that is cost effective for the company and advantageous to employees to retract talent and promote retirement savings.

Employers can give employees the option of a Traditional 401(k) or Roth 401(k) along with the ability to take loans out against the 401(k) assets.

Traditional 401(k)

• Employee contributions into a traditional 401(k) are pre-tax and deducted from gross income on the W-2.
• The employee's taxable income is reduced by the total amount of pre-tax 401(K) contributions for the year and recorded as a tax-deduction on the employee’s tax return.
• The pre-tax assets grow tax-deferred inside the traditional 401(k) and are taxed as ordinary income when distributions start
• To learn more about the tax considerations 401(K) distributions, see our tax planning section.

Roth 401(k)

• Employee contributions into a Roth 401(k) are on an after-tax basis and not deducted from taxable income.
• The after-tax assets grow potentially tax-free inside the Roth 401(k), you must take a qualified withdrawal or distribution.
• The contribution limits for the Roth are the same for the traditional 401(k).
• To learn more about the tax considerations 401(K) distributions, see our tax planning section.

Eligibility to Contribute

Employee eligibility requirements such as age and length of employment are determined by the 401(k)-plan administrator and company when the plan adoption documents are established.

Note: The 401(k)-plan adoption document or agreement can be edited to make updated to the employee eligibility requirements.

Maximum Annual Contribution

Employer: Profit sharing and match: Up to the lesser of 25% of compensation or $69,000 including employee contributions for 2024

Employee (Salary Deferral)

• Up to the lesser of 100% of compensation or for a maximum of $23,000 ($30,500 if age 50 or older) for 2024.
• The total combination of employer and employee (salary deferral) contributions may not exceed $69,000 ($76,500 if age 50 or older) for 2024.

Tax-Deductible Contributions for Employer & Employee:

• Employer contributions are deductible from federal income tax.
• Employees can make pre-tax contributions using the traditional 401(k).

401(k) Fund Lineup - Investments:

Glover Park Wealth Management acts as a 3(21) Co-Fiduciary on the 401(k) and provides a low-cost mutual fund lineup which is continuously monitored.

Withdrawal Rules & Taxes:

Pre-tax 401(k) contributions and earnings are subject to income tax and penalties if withdrawn before 59 ½ years old. Roth contributions are withdrawn tax-free.

Roth earnings are tax-free if the withdrawal is considered a qualified distribution. Learn more about “Roth IRA Distributions” 

Withdrawal Penalties

There is a 10% IRS penalty in a traditional 401(k) if assets are withdrawn before age 59½ unless exception applies.  Retirement Topics Tax on Early Distributions | Internal Revenue Service (irs.gov)

401(k) Distribution Penalty exceptions:

• Separation of service in the year attaining age 55 or older.
• Death
• Disability
• Substantially equal periodic payments made over life expectancy
• Qualified military reservist
• Qualified domestic relations order due to divorce
• Up to $5,000 for qualified adoption/birth expenses

Required Withdrawals (RMD)

Beginning in tax year 2020, the Required Minimum Distributions (RMDs) to start taking qualified distributions or withdrawals changed from age 70½ to age 73 due to the Secure 2.0 Act.

(However, this does not affect participants who turned 70½ on or before 12/31/2019.)

If you are still employed by the employer sponsored retirement plan: 401(k), 403(b), Simple IRA or small-business account then your RMDs may be delayed until the year of retirement.

Keep in mind, some expectations do apply, and we recommend that you meet with your CPA or Tax Advisor.

ERISA Retirement Plan Startup Deadline

For years after 2020, 401(k) plans may be set up by the tax filing deadlines plus extensions.

Employee salary deferral contribution(s) must be deducted from participants’ paychecks.

Employer contributions or profit sharing may be made by the tax filing date plus allowable extensions.

Yearly Education to Retirement Plan Employees & Sponsors:

Glover Park Wealth believes that retirement plan employee education is one of the most important factors of managing and administering a retirement plan, this is one of the major areas of focus that separates Glover Park Wealth from the competition. 

We believe in best practices for employee education in accordance with ERISA §404(c). We have partnered with the top retirement plan education providers in the retirement plan industry to give your company and plan participants annual education and we also provide one-on-one meetings with employees.

Below are the best practices that our firm follows regarding employee education:

General Education

Common questions that we receive during our retirement plan education meetings, we help education employees on best practices.

• Should I make contributions in a down market?
• Taking Loans out against your retirement plan assets
• How much should I contribute?
• How much money do I need in retirement?
• What is a money market, should I invest in it?
• Financial Wellness
• Our education will provide current data on the financial wellness of average retirement plan participants.
• Start contributing, investing, and saving at a young age
• Compounding growth with investment returns
• Retirement plan calculators, how much do I need for retirement?
• Investment options and diversification
• Differences between Tradition and Roth 401(k) Plans.
• Behavioral finance
• Company Match Education

We will discuss exactly how your retirement plan sponsor has setup the plan. We cover the following topics:

The company match percentage and plan eligibility requirements

Vesting schedules for participants

What contribution amount do employees need to make to receive the full retirement plan company match.

Individual Meetings 

We will meet confidentially with plan participants to discuss their current retirement plan contributions and be able to give investment advice on their outside investments.

When you hire our firm, we understand that the financial wellness and education of our plan participants is very important and want to make sure all participants in a Glover Park Wealth Management managed retirement plan are doing their best to save and invest for their future.

Payroll, HR & 401(k): Integration Consulting 

Glover Park Wealth consults with your company HR, accounting, and finance departments on putting together a 360 degree fully integrated payroll and 401(k) plan to make the administration and management of the plan as easy as possible for our retirement plan corporate clients.

Record Keeping Integration

• Example of 360-degree 401(k) integration
• Retirement plan participants can adjust their 401(k)-retirement plan contribution paycheck deferral percentages.
• Participants can elect to take a loan out against their 401(k) assets and have it paid back over time through payroll deductions.
• Hardship Withdrawals
• Roth 401(k) elections or deferrals

Plan Administrator 

The participants change in contribution deferral percentage will be send to the plan administrator.

Payroll System

The new contribution or deferral percentages are automatically updated in the payroll providers database and the next paycheck for the participant will reflect the updated deferral percentage the participant elected to change in the recordkeeping system.

360 Degree Payroll Integration 

The participants new contribution or deferral rate is now automatically synced between the 401(k)-retirement plan recordkeeper and payroll system. This requires no manual data input from the company HR department as the plan is 360 degrees fully integrated.

Mutual Fund Lineup Selection

In the vast landscape of investment options, mutual funds stand out as a popular choice for diversifying portfolios and achieving long-term financial goals. At Glover Park Wealth Management, we employ a rigorous selection and ongoing monitoring process to identify mutual funds that align with our clients' unique investment objectives and risk tolerances.

Strategic Selection Process

Our approach to mutual fund selection begins with an in-depth analysis of fund performance, management tenure, fee structures, and investment strategies. By evaluating these critical factors, we aim to identify funds that are well-positioned for consistent performance and aligned with our investment philosophy.

Continuous Fund Monitoring

Investment landscapes are ever-evolving, and so is our commitment to ensuring your mutual fund selections remain optimal. We continuously monitor fund performance against benchmarks and peer groups, reassessing allocations to adapt to changing market conditions and to capitalize on emerging opportunities.

Transparent Communication 

Our clients are partners in the investment process. We provide regular, detailed updates on mutual fund performance, explaining the rationale behind any recommended adjustments and ensuring you are informed and confident in the direction of your investment strategy.

An Investment Policy Statement (IPS) is a crucial document that serves as a roadmap for your investment strategy. At Glover Park Wealth Management, we believe that a well-crafted IPS is foundational to achieving your investment objectives, providing clarity and guidance through the ups and downs of market cycles.

Customized Investment Framework

Your IPS is tailored to your unique financial situation, outlining your investment goals, risk tolerance, time horizon, and liquidity needs. It serves as a guiding document for making informed investment decisions and setting clear expectations.

Strategic Asset Allocation

The IPS specifies your preferred asset allocation strategy, defining how investments should be distributed across asset classes to balance risk and return in line with your objectives.

Review and Rebalancing Guidelines

Investment environments change, and your IPS includes criteria for reviewing and rebalancing your portfolio. This ensures that your investment strategy remains aligned with your goals, adapting to both your evolving financial needs and market conditions.

Glover Park Wealth is commited to providing personalized investment guidance. Whether you're a seasoned investor or just beginning, our expertise is at your disposal to navigate the complexities of building and managing a robust investment portfolio.

Tailored Strategies

Recognizing that each investor's goals and risk tolerance are unique, we tailor our investment guidance to match your specific financial situation and aspirations. Our strategies are designed not just for wealth accumulation but for sustainable growth and risk management.

Fiduciary Approach

We view investment guidance as an integral part of your overall financial plan. By considering your financial goals in the context of your broader financial picture, including tax implications, retirement planning, and estate considerations, we ensure a harmonized approach to wealth management.

Education and Empowerment

Our role extends beyond making recommendations; we strive to educate and empower our clients. Through clear explanations and ongoing dialogue, we demystify the investment process, enabling you to make informed decisions with confidence.

Selecting and Monitoring Retirement Plan Investments 

ERISA §404(a) outlines the responsibilities of the plan fiduciary duties regarding selecting, monitoring and updating the employer sponsored retirement plan mutual fund investment options.

Maintain and update the Investment Policy Statement (IPS)

• Outlines how the investments selected and monitored
• Monitor the mutual fund investments in the plan and make updates when necessary
• Put together a mutual fund lineup which is diversified and covers all areas of markets, providing participants with a broad range of investments.
• Periodic review of investment recommendations and policies, which are part of each quarterly fiduciary investment review, provided by your plan’s consultant
• Keep records of the Investment Committee meetings and annual plan review meetings with the company and participants.
• Monitoring the expenses of the plan, making sure fees are reasonable.

Glover Park Wealth Management adheres to the ERISA §404(a) rules with your retirement plan.  When working with our firm, we work with the plan administrator to offer the lowest cost mutual funds with exceptional long term investment returns in your selected recordkeeping platform.

Diversified Mutual Fund Lineup in your Retirement Plan 

ERISA §404(c) alleviates the plan sponsors and the retirement plan fiduciaries from liability for losses that result from the participant fund selections.

This protection applies only self-directed investments by participants, however it does not protect investments in the plan that are directed by the plan sponsor, such as employer stock.

To take advantage of ERISA §404(c), the plan must satisfy three categories of requirements:

• Broad diversified menu of low-cost mutual funds in the retirement plan lineup
• Ensuring the retirement plan design and administrative duties are optimized
• Disclosing all documents to participants
• Below are the compliance areas in which we provide advice to retirement plan sponsors to protect plan fiduciaries from participant self-directed losses as outline in ERISA §404(c)
• Broad diversified menu of low-cost mutual funds in the retirement plan lineup with multiple risk categories offered.
• Providing participants, a list of mutual funds in the retirement plan and their expense ratios.

Employee sponsored retirement plans are non-discretionary, meaning the participant has ultimate control over their investment selections and ability to move money in and out of the plan in accordance with the plan adoption agreement.

• Providing participants with retirement plan investment education about the plan, investments, and their options.
• Participants have ultimate control over their investments and must make those elections at the retirement plan custodian of the plan.
• Making sure the retirement plans default fund follows the qualified default account (QDIA) rule
• Distributing the §404(c) Notice and Policy Statement on an ongoing basis so participant disclosure requirements are met.
• Glover Park Wealth Management acts as your 3(21) Co-Fiduciary and retirement plan consultant. Our firm makes sure that your plan adheres to the ERISA §404(c) rules and regulations.