We take care of everything from document preparation to compliance testingIn addition to 401(k) and Profit Sharing plans, First American Bank provides services to companies with Money Purchase, ESOP, SIMPLE IRA and Simplified Employee Pension (SEP) plans. Each has distinct and often complex operating, reporting and testing requirements. Depending on the type of plan you sponsor, our administrative services may include:
- Calculate employer contributions including profit sharing, safe harbor and/or matching
- Perform all compliance testing
- Monitor deduction limits
- Review and update participant vesting
- Reconcile contributions and prepare the financial statement for the plan assets
- Prepare required reports and schedules as well as the Summary Annual Report
- Draft the Safe Harbor and Qualified Default Investment Alternative Notices
- Calculate contributions for self-employed individuals based on self-employment income
- Assist in the processing of distributions including tax remittals and relevant reporting
- Prepare participant statements
- Prepare participant loan documentation
- Provide website access to plan accounts for the participants, plan sponsor and outside advisors
Not FDIC Insured | Not Bank Guaranteed | May Lose Value | Not Guaranteed by Any Government Agency | Not a Bank Deposit
Prior to 2020, you were required to start taking Required Minimum Distributions (RMDs) by April 1 of the year following the year in which you attained age 70 ½. That rule still applies if you attained age 70½ by the end of 2019. Once you are required to begin taking RMDs, you must continue. For 2020, the SECURE Act increased the age to begin RMDs to age 72 and then subsequently with the passing of SECURE Act 2.0 beginning in 2023, the age has been raised again. The schedule below outlines at what age you must begin taking RMDs.
Date of birth before 7/1/1949, RMD starts at age 70 ½. Date of birth 7/1/1949 to 12/31/1950, RMD starts at age 72. Date of birth 1/1/1951 to 12/31/1959, RMD starts at age 73. After 12/31/1958, RMD starts at age 75.
The same April 1 deadline applies. Thereafter, you must take RMDs annually on or before December 31. Note, two required distributions will be issued your first year if you wait until the period January 1 to April 1 to begin your RMDs. You may avoid two taxable distributions in the first year by taking your first withdrawal on or before December 31 of the year in which you attain the applicable age as shown above.
However, if you are still working, you are not required to begin RMDs from your employer sponsored plan until April 1 of the year following the year in which you terminate employment. This exception does not apply if you own more than 5% of the employer, nor does it apply to IRAs.
a. $23,000 for 2024;
b. the maximum deferral amount allowed under the terms of the plan; or
c. the amount that allows the plan to meet the required nondiscrimination tests.
In addition, if you attain age 50 or older by December 31, you may defer an additional $7,500 catch up contribution.