BRP Tool

Note: The SECURE Act 2.0 of 2022 made significant changes to the rules governing small business retirement plans. Among other things, this new law opens the door to Roth funding alternatives through SEP and SIMPLE IRA plans and provides expanded employer funding options under SIMPLE IRAs. These enhanced funding options, however, cannot be incorporated into small business retirement offerings until additional guidance is provided by federal regulators. This tool reflects the funding options currently available under various small business retirement plan offerings. The tool will be updated to reflect expanded funding options under SECURE 2.0 once sufficient regulatory guidance is available.

When it comes to retirement savings, small business owners and independent contractors have a number of tax-favored options available including

SEP IRA Plans,
SIMPLE IRA Plans,
Profit-Sharing Plans, and
401(k) Plans.

While it’s great to have multiple options, sometimes the sheer variety of alternatives can be overwhelming. The Retirement Plans Comparison Tool is designed to help simplify the plan selection process.

Does your business employ common-law employees? Yes No

A key differentiating feature between various retirement savings programs is the funding responsibility. Which of the following statements best describes the type of funding arrangement you would like? I am looking for an arrangement under which contributions are made exclusively by the business. I am looking for a retirement savings arrangement under which the employees are primarily responsible for making their own contributions. I am looking for an arrangement that provides funding flexibility for both the business and for employees.

Under some business retirement plan arrangements, plan participants are restricted from accessing their retirement savings until they incur a “triggering event” (e.g., separation from service, retirement age, etc.). Are you looking for a business retirement plan that restricts when plan participants may take withdrawals of their retirement savings? Yes, restricted access to funds is an important feature Restricted access to funds is OK, but not crucial No, I do not wish to restrict participant’s access to their funds

Some business retirement plans allow the plan sponsor to impose a vesting schedule. Are you looking for a plan option that allows you to impose a vesting schedule? Yes, I am looking for a plan option that provides for a vesting schedule I would like to have a vesting schedule, but this plan feature is not crucial No, having the option to impose a vesting schedule is not important

Some types of business retirement plans have the option of allowing plan participants to take personal loans from their plan. Is the ability to take plan loans an important plan feature in selecting a business retirement plan? Yes, I would like a plan that allows for plan loans A plan loan feature would be nice, but is not a critical feature No, the ability to take plan loans is not an important feature

Some types of business retirement plans have the option of allowing plan participants to take a personal loan from the plan. Is the ability to take plan loans an important plan feature in selecting a business retirement plan? Yes, I would like a plan that allows for plan loans A plan loan feature would be nice, but is not a critical feature No, the ability to take plan loans is not an important feature

A key differentiating feature between various retirement savings programs is the maximum permissible annual contribution. Most arrangements allow you to vary your contribution level from year to year. Which of the following statements best describes your funding goals? I do not anticipate contributing more than 25% of my income for any given year. I would like the flexibility to potentially contribute more than 25% of my income in a given year.

Some types of business retirement plans allow you to take a personal loan from your retirement savings. Is the ability to take plan loans an important plan feature in selecting a business retirement plan? Yes, I would like a plan that allows for plan loans A plan loan feature would be nice, but is not a critical feature No, the ability to take plan loans is not an important feature

Some types of business retirement plans permit Roth contributions. Is the ability to make Roth contributions an important plan feature in selecting a business retirement plan? Yes, I would like the option to make Roth contributions I might be interested in making Roth contributions No, I am not interested in making Roth contributions

A key differentiating feature between various retirement savings programs is the maximum permissible annual contribution. Most arrangements allow you to vary the contribution level from year to year. Which of the following statements best describes your funding goals? We do not anticipate the need for funding in excess of 25% of compensation. While the ability for some/all business owners to achieve contributions in excess of 25% of compensation is a welcome feature, it is not a critical feature. We are most interested in an arrangement that would potentially allow some/all business owners to achieve allocations in excess of 25% of compensation.

Some types of business retirement plans allow you to take a personal loan from your retirement savings. Is the ability to take plan loans an important plan feature in selecting a business retirement plan? Yes, we would like a plan that allows for plan loans A plan loan feature would be nice, but is not a critical feature No, the ability to take plan loans is not an important feature

Some types of business retirement plans permit Roth contributions. Is the ability to make Roth contributions an important plan feature in selecting a business retirement plan? Yes, we would like the option to make Roth contributions We might be interested in making Roth contributions No, we are not interested in making Roth contributions

Some types of business retirement plans allow you to take a personal loan from your retirement savings. Is the ability to take plan loans an important plan feature in selecting a business retirement plan? Yes, we would like a plan that allows for plan loans A plan loan feature would be nice, but is not a critical feature No, the ability to take plan loans is not an important feature

Some types of business retirement plans permit Roth contributions. Is the ability to make Roth contributions an important plan feature in selecting a business retirement plan? Yes, we would like the option to make Roth contributions We might be interested in making Roth contributions No, we are not interested in making Roth contributions