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We take care of everything from document preparation to compliance testing

In 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
Disclosures

Not FDIC Insured | Not Bank Guaranteed | May Lose Value | Not Guaranteed by Any Government Agency | Not a Bank Deposit

Frequently Asked Questions

The IRS requires 20% withholding on all qualified plan distributions eligible for rollover to an IRA or another qualified plan. You will report the distribution as ordinary income on your personal tax return. Depending on your personal tax bracket, you may be required to pay additional taxes on the distribution or you may be entitled to a refund. If the additional amount of tax due is substantial, you may be required to make estimated tax payments. You may also be required to pay state income taxes. You should consult your personal tax advisor before making decisions regarding your distribution.
In general, Required Minimum Distributions (RMDs) from your retirement accounts (including IRAs) need to begin by April 1 following the year in which you attain age 70½. Thereafter, the plan must issue RMDs annually on or before December 31. Note that two required distributions will be issued your first year (April 1 and December 31) if you wait until April 1 to begin your distributions. You may avoid two taxable distributions in the first year by taking your first withdrawal by December 31 of the year in which you attain age 70½.

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.
The annual deferral may not exceed the lesser of:

a. $19,000 for 2019;

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 $6,000 catch up contribution.
If a plan accepts rollover distributions from other qualified plans, it may also allow for employees to make a rollover contribution before they meet the plan's minimum age and service eligibility requirements. These employees would be considered 'limited participants' in the plan.
Yes, the additional 10% tax applies, with limited exceptions. Exceptions include distributions that are made to a participant after termination of employment after attainment of age 55, distributions that are attributable to an employee being disabled, and distributions that are made to cover deductible medical expenses.

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