Streamlined 401k’s are In

The IRS has recently begun publicizing the “starter 401(k) plan” applicable to small employers (firms with fewer than 100 employees). Employees are automatically treated as having opted in to make elective contributions of at least 3% and not more than 15% of their compensation. Employers benefit from a three-year start-up tax credit of up to $5,000 and are not required to make employer contributions. Moreover, these streamlined plans are not subject to the costly annual nondiscrimination audits.