The SBO-401(k) plan is suitable if the plan covers only the business owners - in this case, the partners in the partnership. If the other employees who are not owners of the business meet the eligibility requirements, a savings incentive match plan for employees of small employers (SIMPLE), simplified employee pension (SEP) or profit-sharing plan may be more suitable for the business.
Assume that the eligibility requirements are as follows:
- employees must reach age 21, and
- employees must perform at least one year of service. For this purpose, the service requirement could be one in which individuals who work fewer than 1,000 hours during a 12-month period will not be considered to have accrued a year of service.
If any one of the employees meets these requirements, the partnership is not eligible to adopt the SBO-401(k). Business owners should be careful about the eligibility requirements they select for the plan, as they do not want to exclude themselves; if the business owners do not meet the age and service requirements, they too would be excluded.
<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /?>
This question was answered by Denise Appleby
Learn how to invest your IRA assets in mutual funds. Discover a few of the different types of mutual funds available for ...
Read how online retailers that operate through eBay or Etsy can list certain expenses as cost of goods sold and even claim ...
Learn how pay-as-you-go pension plans are different than fully funded pension plans and why some government plans are running ...
Learn about the retirement option, the Teacher Retirement System, offered to teachers and other public school employees, ...
Senior move managers (SMMs) help seniors downsize and relocate ...
Elder care, sometimes called elderly care, refers to services ...
A small-scale industry often operated out of a home, rather than ...
A regulatory environment in which firms prefer to stay small ...
Definition of Gold IRA
An IRS-allowed movement of assets into or out of an individual ...