small business
401-K & 403-B plans
Personalized solutions. at an Affordable price.
We offer an affordable, full-service 401(k) plan solution that is ideal for small and midsized businesses in the healthcare and transportation industries.
Give your employees access to personalized retirement solutions crafted around each individual participant’s goals, dreams, and circumstances regardless of plan size.
EASY TO START. SIMPLE TO MANAGE. FULLY CUSTOMIZED.
Our solution ensures that every 401(k) has the essential elements in place to demonstrate a sound fiduciary process – from clearly defined goals and responsibilities to a formalized investment policy, periodic monitoring and benchmarking, centralized compliance, participant success programs, and a proactive service model.
Frequently Asked Questions
What are the potential tax benefits of a 401(k)?
There are several tax advantages regarding a 401(k). Let’s start with the employer. All employer contributions will be pretax therefore lowering the taxable income for the business. Those employer contributions are deductible as a business expense. The business will also receive tax credits the first three years. the IRS has created a small business tax credit to incentivize business to start 401(k) plans. Currently, employers with 100 or fewer employees can write off up to 50% of startup costs of a new 401(k) plan, up to $5,000 per year for the first three years of a plan.
How much can employers contribute annually?
Employers will have three options to choose from when deciding to offer an employer contribution. First, the employer can decide not to contribute at all. Secondly, you can fall within the Safe Harbor requirement (recommended for small businesses) and offer either a 3% non-elective or 4% match. Lastly, you can customize your company match to your liking. Around 80% of our plans chose a Safe Harbor 401(k) Plan. A Safe Harbor 401(k) will benefit both the employer and employee. The employer is only able to match on a salary of $290,000 or less. Anything above that salary will not be eligible for a match.
Does my business have to contribute to employee accounts?
No, employer contributions are optional. If the employer elects not to contribute towards the 401(k) plan, the plan will be subject to non-discrimination testing. If your plan is subject to that testing, key employees and HCE’s will be limited on their annual contributions. If you do decide to contribute to your 401(k) plan, you have further options. You can contribute a percentage of each employee’s compensation to the employee’s account (called a nonelective contribution), you can match the amount your employees decide to contribute (within the limits of current law) or you can do both.
How do you choose a 401(k) provider?
Choosing a 401k provider can be overwhelming, time consuming and confusing. Since there are many providers to choose from, keep in mind that not all will offer the same services or prices. Some 401(k) plan providers will cater more to smaller companies, while others are set up for medium-sized or large businesses. There are usually three providers involved in a 401k:
- Financial Advisor
- Third Party Administrator
- Recordkeeper
Cognis Group acts as your 3(21) or 3(38) advisor and works with select Third party administrators/record-keepers, including Betterment, Guideline, and 401GO.
What is the Secure Act 2.0 and how does it affect small businesses?
The SECURE 2.0 Act is a recent law that makes significant changes to retirement account rules in the United States. The law’s goal is to encourage more workers to save for retirement by making it easier for employees to participate in their employers’ retirement plans. The law includes provisions that affect 401(k), 403(b), IRA, Roth accounts, and related tax breaks. You may access a summary of the Secure Act 2.0 in our blog here
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We specialize in personalized retirement solutions for small businesses, the self-employed, and individual investors.
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LEGAL DISCLOSURE
Cognis Group is a State registered investment adviser, pursuant to the Investment Advisers Act of 1940, as amended, with principal offices in Scottsdale AZ. Cognis Group and its representatives are in compliance with the current filing requirements placed upon registered investment advisers by those states in which it maintains clients. A copy of our current written disclosure statement (Form ADV-Part 2) discussing business operations, services and fees is available upon request or may be downloaded here.
This website does not constitute an offer to provide investment advisory services in any jurisdiction in which such offer would be unlawful under the securities laws of such jurisdiction. The information contained on this site is for informational purposes only and should not be construed as financial, investment, legal, tax, or other advice. By accessing this website, you agree to be bound by the above terms and conditions.
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