🕷️ Crawler Inspector

URL Lookup

Direct Parameter Lookup

Raw Queries and Responses

1. Shard Calculation

Query:

Response:

Calculated Shard: 119 (from laksa039)

2. Crawled Status Check

Query:

curl -X POST \
  'http://laksa119.int.ahrefs:8124/' \
  -H 'Content-Type: text/plain' \
  -H 'X-ClickHouse-Database: crawler3' \
  -H 'Authorization: Basic YXBpOg==' \
  -d 'SELECT getAhrefsURLFromUnparsed(src_unparsed) AS found_url, ifNull(toUnixTimestamp(download_stamp), 0) AS crawl_time, ifNull(toUnixTimestamp(props_url_first_seen), 0) AS first_indexed_time, download_http_code AS http_code, src_unparsed AS src_unparsed, src_root_hash AS src_root_hash, history_drop_reason AS history_drop_reason, meta_title AS meta_title, meta_descriptions AS meta_descriptions, attrs_boilerpipe_text AS attrs_boilerpipe_text, attrs_markdown AS attrs_markdown, attrs_readable_markdown AS attrs_readable_markdown, meta_canonical AS meta_canonical FROM crawler3.page_info_local FINAL PREWHERE (src_root_hash, src_unparsed) IN ((getAhrefsRootHashFromUnparsed(getAhrefsUnparsedNoserviceFromURL(\'https://www.irs.gov/retirement-plans/irc-401k-plans-establishing-a-401k-plan\')), getAhrefsUnparsedNoserviceFromURL(\'https://www.irs.gov/retirement-plans/irc-401k-plans-establishing-a-401k-plan\'))) FORMAT JSONEachRow'

Response:

{"found_url":"https:\/\/www.irs.gov\/retirement-plans\/irc-401k-plans-establishing-a-401k-plan","crawl_time":1776720902,"first_indexed_time":1484925260,"http_code":200,"src_unparsed":"gov,irs!www,\/retirement-plans\/irc-401k-plans-establishing-a-401k-plan s443","src_root_hash":"796284942891862319","history_drop_reason":null,"meta_title":"IRC 401(k) plans - Establishing a 401(k) plan | Internal Revenue Service","meta_descriptions":["The basic actions that must be taken to establish a 401(k) plan."],"attrs_boilerpipe_text":"When you establish a 401(k) plan you must take certain basic actions. For instance, one of your decisions will be whether to set up the plan yourself or consult a professional or financial institution - such as a bank, mutual fund provider, or insurance company - to help you establish and maintain the plan.\nInitial actions\nHere are four basic actions necessary to have a tax-advantaged 401(k) plan:\nAdopt a written plan,\nArrange a trust fund for the plan’s assets,\nDevelop a recordkeeping system, and\nProvide plan information to participants.\nAdopt a written plan\nPlans begin with a written document that serves as the foundation for day-to-day plan operations. If you have hired someone to help with your plan, that person likely will provide it. If not, consider obtaining assistance from a financial institution or retirement plan professional. In either case, you are bound by the terms of the plan document.\nBefore beginning a plan document, however, you will need to decide on the type of 401(k) plan that is best for you - a traditional 401(k), a safe harbor 401(k), or a SIMPLE 401(k) plan.\nA\ntraditional 401(k) plan\noffers the maximum flexibility of the three types of plans. Employers can choose to make contributions on behalf of all participants, match employees’ deferrals, or do both. These contributions can be subject to a vesting schedule (which provides that an employee’s right to employer contributions becomes nonforfeitable only after a period of time). In addition, a traditional 401(k) allows participants to make pre-tax contributions through payroll deductions. Annual testing ensures that benefits for rank-and-file employees are proportional to benefits for owners\/managers.\nA\nsafe harbor 401(k) plan\nis similar to a traditional 401(k) plan, but, among other things, must provide for employer contributions that are fully vested when made. However, the safe harbor 401(k) is not subject to many of the complex tax rules that are associated with a traditional 401(k) plan, including annual nondiscrimination testing.\nAn\nautomatic enrollment 401(k) plan\nPDF\n allows an employer to automatically deduct a fixed percentage or amount from an employee’s wages and contribute that amount to the retirement plan unless the employee has affirmatively chosen to contribute nothing or a different amount. These automatic enrollment contributions qualify as\nelective deferrals\n.\nRevenue Ruling 2009-30\nPDF\ndemonstrates ways a 401(k) plan sponsor can include automatic contribution increases in its plan.\nNotice 2009-65\nPDF\nprovides sample automatic enrollment plan language that a 401(k) plan sponsor can adopt with automatic IRS approval.\nThe traditional, safe harbor and automatic enrollment 401(k) plans are for employers of any size and can be combined with other retirement plans.\nA\nSIMPLE 401(k) plan\nwas created so that small businesses could have an effective, cost-efficient way to offer retirement benefits to their employees. A SIMPLE 401(k) plan is not subject to the annual nondiscrimination tests that apply to the traditional plans. Similar to a safe harbor 401(k) plan, however, the employer is required to make employer contributions that are fully vested. This type of 401(k) plan is available to employers with 100 or fewer employees who received at least $5,000 in compensation from the employer for the preceding calendar year. In addition, the employer can’t maintain any other retirement plans.\nOnce your have decided on the type of plan for your company, you will have flexibility in choosing some of the plan’s features -- such as which employees can contribute to the plan and how much. Other features written into the plan are required by law. For instance, the plan document must describe how certain key functions are carried out, such as how contributions are deposited in the plan.\nArrange a trust fund for the plan’s assets\nA plan’s assets must be held in trust to assure that assets are used solely to benefit the participants and their beneficiaries.  The trust must have at least one trustee to handle contributions, plan investments, and distributions to and from the 401(k) plan. Since the financial integrity of the plan depends on the trustee, this is one of the most important decisions you will make in establishing a 401(k) plan. If you set up your plan through insurance contracts, the contracts do not need to be held in trust.\nDevelop a recordkeeping system\nAn accurate recordkeeping system helps track and properly attribute contributions, earnings and losses, plan investments, expense and benefit distributions in participants’ accounts. If you have a contract administrator or financial institution assist in managing the plan, that entity typically will help in keeping the required records. In addition, a recordkeeping system will help you, your plan administrator, or financial provider prepare the plan’s annual return\/report that must be filed with the Federal government.\nProvide plan information to employees\nAs you put your 401(k) plan in place, you must notify employees who are eligible to participate in the plan about your plan’s benefits and requirements. A summary plan description, or SPD, is the primary vehicle to inform participants and beneficiaries about the plan and how it operates. The SPD typically is created with the plan document. You will need to send it to all plan participants. In addition, you may want to provide your employees with information that emphasizes the advantages of joining your 401(k) plan. Employee perks - such as pre-tax contributions to a 401(k) plan (or tax-free distributions in the case of Roth 401(k)s), employer contributions (if you choose to make them), and compounded tax-deferred earnings - help highlight the advantages of participating in the plan.","attrs_markdown":"[Skip to main content](https:\/\/www.irs.gov\/retirement-plans\/irc-401k-plans-establishing-a-401k-plan#main-content)\n\n![](https:\/\/www.irs.gov\/themes\/custom\/pup_base\/images\/us_flag_small.png)\n\nAn official website of the United States government\n\nHere's how you know\n\nHere's how you know\n\n![](https:\/\/www.irs.gov\/themes\/custom\/pup_base\/images\/icon-dot-gov.svg)\n\n**Official websites use .gov**\n\nA **.gov** website belongs to an official government organization in the United States.\n\n![](https:\/\/www.irs.gov\/themes\/custom\/pup_base\/images\/icon-https.svg)\n\n**Secure .gov websites use HTTPS**\n\nA **lock** (![Locked padlock icon](https:\/\/www.irs.gov\/themes\/custom\/pup_base\/images\/lock.svg)) or **https:\/\/** means you've safely connected to the .gov website. Share sensitive information only on official, secure websites.\n\n[![Home](https:\/\/www.irs.gov\/themes\/custom\/pup_base\/IRS-Logo.svg) ![Home](https:\/\/www.irs.gov\/themes\/custom\/pup_irs\/images\/logo-print.svg)](https:\/\/www.irs.gov\/ \"Home\")\n\n## Information Menu\n- [Help](https:\/\/www.irs.gov\/help\/let-us-help-you \"Help\")\n- [News](https:\/\/www.irs.gov\/newsroom \"News\")\n- English\n  \n  - [Español](https:\/\/www.irs.gov\/es\/retirement-plans\/irc-401k-plans-establishing-a-401k-plan)\n  - [中文 (简体)](https:\/\/www.irs.gov\/zh-hans\/retirement-plans\/irc-401k-plans-establishing-a-401k-plan)\n  - [中文 (繁體)](https:\/\/www.irs.gov\/zh-hant\/retirement-plans\/irc-401k-plans-establishing-a-401k-plan)\n  - [한국어](https:\/\/www.irs.gov\/ko\/retirement-plans\/irc-401k-plans-establishing-a-401k-plan)\n  - [Русский](https:\/\/www.irs.gov\/ru\/retirement-plans\/irc-401k-plans-establishing-a-401k-plan)\n  - [Tiếng Việt](https:\/\/www.irs.gov\/vi\/retirement-plans\/irc-401k-plans-establishing-a-401k-plan)\n  - [Kreyòl ayisyen](https:\/\/www.irs.gov\/ht\/retirement-plans\/irc-401k-plans-establishing-a-401k-plan)\n- [Tax Pros](https:\/\/www.irs.gov\/tax-professionals)\n- Sign in\n  - [Individual](https:\/\/sa.www4.irs.gov\/ola)\n  - [Business](https:\/\/sa.www4.irs.gov\/bola)\n  - [Tax Pro](https:\/\/sa.www4.irs.gov\/taxpro)\n  - ## Access your tax information with an IRS account.\n    - Refunds\n    - Payments\n    - Tax records\n  - [Create account](https:\/\/www.irs.gov\/your-account)\n\n- Search\n- - Sign in\n    - [Individual](https:\/\/sa.www4.irs.gov\/ola)\n    - [Business](https:\/\/sa.www4.irs.gov\/bola)\n    - [Tax Pro](https:\/\/sa.www4.irs.gov\/taxpro)\n    - ## Access your tax information with an IRS account.\n      - Refunds\n      - Payments\n      - Tax records\n    - [Create account](https:\/\/www.irs.gov\/your-account)\n- Menu\n\n## Main navigation\n[![Home](https:\/\/www.irs.gov\/themes\/custom\/pup_base\/IRS-Logo.svg)](https:\/\/www.irs.gov\/ \"Home\")\n\n- [File](https:\/\/www.irs.gov\/filing)\n- [Pay](https:\/\/www.irs.gov\/payments)\n- [Refunds](https:\/\/www.irs.gov\/refunds)\n- [Credits & Deductions](https:\/\/www.irs.gov\/credits-and-deductions)\n- [Forms](https:\/\/www.irs.gov\/forms-instructions)\n- [Report Fraud](https:\/\/www.irs.gov\/help\/report-fraud)\n\n## Information Menu\n- [Help](https:\/\/www.irs.gov\/help\/let-us-help-you \"Help\")\n- [News](https:\/\/www.irs.gov\/newsroom \"News\")\n- [Tax Pros](https:\/\/www.irs.gov\/tax-professionals)\n- Sign in\n  - [Individual](https:\/\/sa.www4.irs.gov\/ola)\n  - [Business](https:\/\/sa.www4.irs.gov\/bola)\n  - [Tax Pro](https:\/\/sa.www4.irs.gov\/taxpro)\n  - ## Access your tax information with an IRS account.\n    - Refunds\n    - Payments\n    - Tax records\n  - [Create account](https:\/\/www.irs.gov\/your-account)\n\n## [File](https:\/\/www.irs.gov\/retirement-plans\/irc-401k-plans-establishing-a-401k-plan)\n- [Overview](https:\/\/www.irs.gov\/filing)\n- INFORMATION FOR…\n- [Individuals](https:\/\/www.irs.gov\/individual-tax-filing)\n- [Business and self-employed](https:\/\/www.irs.gov\/businesses)\n- [Charities and nonprofits](https:\/\/www.irs.gov\/charities-and-nonprofits)\n- [International filers](https:\/\/www.irs.gov\/individuals\/international-taxpayers)\n- [Retirement](https:\/\/www.irs.gov\/retirement-plans)\n- [Governments and tax-exempt bonds](https:\/\/www.irs.gov\/government-entities)\n- [Indian Tribal Governments](https:\/\/www.irs.gov\/government-entities\/indian-tribal-governments)\n- FILING FOR INDIVIDUALS\n- [How to file](https:\/\/www.irs.gov\/filing\/individuals\/how-to-file)\n- [When to file](https:\/\/www.irs.gov\/filing\/individuals\/when-to-file)\n- [Where to file](https:\/\/www.irs.gov\/filing\/where-to-file-tax-returns-addresses-listed-by-return-type)\n- [Update your information](https:\/\/www.irs.gov\/filing\/individuals\/update-my-information)\n- POPULAR\n- [Tax record (transcript)](https:\/\/www.irs.gov\/individuals\/get-transcript)\n- [Apply for an Employer ID Number (EIN)](https:\/\/www.irs.gov\/businesses\/small-businesses-self-employed\/get-an-employer-identification-number)\n- [Amend return](https:\/\/www.irs.gov\/filing\/file-an-amended-return)\n- [Identity Protection PIN (IP PIN)](https:\/\/www.irs.gov\/identity-theft-fraud-scams\/get-an-identity-protection-pin)\n## [Pay](https:\/\/www.irs.gov\/retirement-plans\/irc-401k-plans-establishing-a-401k-plan)\n- [Overview](https:\/\/www.irs.gov\/payments)\n- PAY BY\n- [Bank Account (Direct Pay)](https:\/\/www.irs.gov\/payments\/direct-pay-with-bank-account)\n- [Payment Plan (Installment Agreement)](https:\/\/www.irs.gov\/payments\/online-payment-agreement-application)\n- [Electronic Federal Tax Payment System 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Deductions](https:\/\/www.irs.gov\/retirement-plans\/irc-401k-plans-establishing-a-401k-plan)\n- [Overview](https:\/\/www.irs.gov\/credits-and-deductions)\n- INFORMATION FOR...\n- [Individuals](https:\/\/www.irs.gov\/credits-and-deductions-for-individuals \"For you and your family\")\n- [Businesses & Self-Employed](https:\/\/www.irs.gov\/credits-deductions\/businesses \"Standard mileage and other information\")\n- POPULAR\n- [Earned Income Credit (EITC)](https:\/\/www.irs.gov\/credits-deductions\/individuals\/earned-income-tax-credit-eitc)\n- [Child Tax Credit](https:\/\/www.irs.gov\/credits-deductions\/individuals\/child-tax-credit)\n- [Clean Energy and Vehicle Credits](https:\/\/www.irs.gov\/credits-deductions\/clean-vehicle-and-energy-credits)\n- [Standard Deduction](https:\/\/www.irs.gov\/help\/ita\/how-much-is-my-standard-deduction)\n- [Retirement Plans](https:\/\/www.irs.gov\/retirement-plans)\n## [Forms](https:\/\/www.irs.gov\/retirement-plans\/irc-401k-plans-establishing-a-401k-plan)\n- [Overview](https:\/\/www.irs.gov\/forms-instructions)\n- POPULAR FORMS & INSTRUCTIONS\n- [Form 1040](https:\/\/www.irs.gov\/forms-pubs\/about-form-1040 \"Individual Income Tax Return\")\n- [Form 1040 Instructions](https:\/\/www.irs.gov\/instructions\/i1040gi \"Instructions for Form 1040 \")\n- [Form W-9](https:\/\/www.irs.gov\/forms-pubs\/about-form-w-9 \"Request for Taxpayer Identification Number (TIN) and Certification\")\n- [Form 4506-T](https:\/\/www.irs.gov\/forms-pubs\/about-form-4506-t \"Request for Transcript of Tax Return\")\n- [Form W-4](https:\/\/www.irs.gov\/forms-pubs\/about-form-w-4 \"Employee's Withholding Certificate\")\n- [Form 941](https:\/\/www.irs.gov\/forms-pubs\/about-form-941 \"Employer's Quarterly Federal Tax Return\")\n- [Form W-2](https:\/\/www.irs.gov\/forms-pubs\/about-form-w-2 \"Wage and Tax Statement\")\n- [Form 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message](https:\/\/www.irs.gov\/help\/report-fraud\/report-fake-irs-treasury-or-tax-related-emails-and-messages)\n- [Tax return preparer](https:\/\/www.irs.gov\/help\/report-fraud\/make-a-complaint-about-a-tax-return-preparer)\n\n## Main navigation\n- [File](https:\/\/www.irs.gov\/filing)\n- [Pay](https:\/\/www.irs.gov\/payments)\n- [Refunds](https:\/\/www.irs.gov\/refunds)\n- [Credits & Deductions](https:\/\/www.irs.gov\/credits-and-deductions)\n- [Forms & Instructions](https:\/\/www.irs.gov\/forms-instructions)\n\n## Info Menu Mobile\n- [Charities & Nonprofits](https:\/\/www.irs.gov\/charities-and-nonprofits)\n- [Help](https:\/\/www.irs.gov\/help\/let-us-help-you \"Help\")\n- English\n  \n  - [Español](https:\/\/www.irs.gov\/es\/retirement-plans\/irc-401k-plans-establishing-a-401k-plan)\n  - [中文 (简体)](https:\/\/www.irs.gov\/zh-hans\/retirement-plans\/irc-401k-plans-establishing-a-401k-plan)\n  - [中文 (繁體)](https:\/\/www.irs.gov\/zh-hant\/retirement-plans\/irc-401k-plans-establishing-a-401k-plan)\n  - [한국어](https:\/\/www.irs.gov\/ko\/retirement-plans\/irc-401k-plans-establishing-a-401k-plan)\n  - [Русский](https:\/\/www.irs.gov\/ru\/retirement-plans\/irc-401k-plans-establishing-a-401k-plan)\n  - [Tiếng Việt](https:\/\/www.irs.gov\/vi\/retirement-plans\/irc-401k-plans-establishing-a-401k-plan)\n  - [Kreyòl ayisyen](https:\/\/www.irs.gov\/ht\/retirement-plans\/irc-401k-plans-establishing-a-401k-plan)\n- [News](https:\/\/www.irs.gov\/newsroom \"News\")\n- [Tax Pros](https:\/\/www.irs.gov\/tax-professionals \"Tax Pros\")\n\n1. [Home](https:\/\/www.irs.gov\/)\n2. [Retirement Plans](https:\/\/www.irs.gov\/retirement-plans)\n3. IRC 401(k) plans - Establishing a 401(k) plan\n# IRC 401(k) plans - Establishing a 401(k) plan\n\n### More In Retirement Plans\n- [IRAs](https:\/\/www.irs.gov\/retirement-plans\/individual-retirement-arrangements-iras \"IRAs\")\n- [Types of retirement plans](https:\/\/www.irs.gov\/retirement-plans\/plan-sponsor\/types-of-retirement-plans \"Types of retirement plans\")\n- [Required minimum distributions](https:\/\/www.irs.gov\/retirement-plans\/plan-participant-employee\/retirement-topics-required-minimum-distributions-rmds \"Required minimum distributions\")\n- [Published guidance](https:\/\/www.irs.gov\/retirement-plans\/published-guidance \"Published guidance\")\n- [Forms and publications](https:\/\/www.irs.gov\/retirement-plans\/retirement-plan-forms-and-publications \"Forms and publications\")\n- [Operate a retirement plan](https:\/\/www.irs.gov\/retirement-plans\/operate-a-retirement-plan \"Operate a retirement plan\")\n- [News](https:\/\/www.irs.gov\/retirement-plans\/newsletters \"News\")\n- [Topic index](https:\/\/www.irs.gov\/retirement-plans\/plan-participant-employee\/retirement-topics \"Topic index\")\n\nWhen you establish a 401(k) plan you must take certain basic actions. For instance, one of your decisions will be whether to set up the plan yourself or consult a professional or financial institution - such as a bank, mutual fund provider, or insurance company - to help you establish and maintain the plan.\n\n## Initial actions\nHere are four basic actions necessary to have a tax-advantaged 401(k) plan:\n\n- Adopt a written plan,\n- Arrange a trust fund for the plan’s assets,\n- Develop a recordkeeping system, and\n- Provide plan information to participants.\n### Adopt a written plan\nPlans begin with a written document that serves as the foundation for day-to-day plan operations. If you have hired someone to help with your plan, that person likely will provide it. If not, consider obtaining assistance from a financial institution or retirement plan professional. In either case, you are bound by the terms of the plan document.\n\nBefore beginning a plan document, however, you will need to decide on the type of 401(k) plan that is best for you - a traditional 401(k), a safe harbor 401(k), or a SIMPLE 401(k) plan.\n\nA **traditional 401(k) plan** offers the maximum flexibility of the three types of plans. Employers can choose to make contributions on behalf of all participants, match employees’ deferrals, or do both. These contributions can be subject to a vesting schedule (which provides that an employee’s right to employer contributions becomes nonforfeitable only after a period of time). In addition, a traditional 401(k) allows participants to make pre-tax contributions through payroll deductions. Annual testing ensures that benefits for rank-and-file employees are proportional to benefits for owners\/managers.\n\nA **safe harbor 401(k) plan** is similar to a traditional 401(k) plan, but, among other things, must provide for employer contributions that are fully vested when made. However, the safe harbor 401(k) is not subject to many of the complex tax rules that are associated with a traditional 401(k) plan, including annual nondiscrimination testing.\n\nAn **[automatic enrollment 401(k) plan PDF](https:\/\/www.irs.gov\/pub\/irs-pdf\/p4674.pdf \"1120 Publ 4674                           (PDF)\")** allows an employer to automatically deduct a fixed percentage or amount from an employee’s wages and contribute that amount to the retirement plan unless the employee has affirmatively chosen to contribute nothing or a different amount. These automatic enrollment contributions qualify as [elective deferrals](https:\/\/www.irs.gov\/retirement-plans\/plan-participant-employee\/retirement-plans-definitions \"Retirement plans definitions\").\n\n- [Revenue Ruling 2009-30 PDF](https:\/\/www.irs.gov\/pub\/irs-drop\/rr-09-30.pdf \"RR-2009-30\") demonstrates ways a 401(k) plan sponsor can include automatic contribution increases in its plan.\n- [Notice 2009-65 PDF](https:\/\/www.irs.gov\/pub\/irs-drop\/n-09-65.pdf \"n-09-65\") provides sample automatic enrollment plan language that a 401(k) plan sponsor can adopt with automatic IRS approval.\n\nThe traditional, safe harbor and automatic enrollment 401(k) plans are for employers of any size and can be combined with other retirement plans.\n\nA **[SIMPLE 401(k) plan](https:\/\/www.irs.gov\/retirement-plans\/choosing-a-retirement-plan-simple-401k-plan \"Choosing a retirement plan: SIMPLE 401k plan\")** was created so that small businesses could have an effective, cost-efficient way to offer retirement benefits to their employees. A SIMPLE 401(k) plan is not subject to the annual nondiscrimination tests that apply to the traditional plans. Similar to a safe harbor 401(k) plan, however, the employer is required to make employer contributions that are fully vested. This type of 401(k) plan is available to employers with 100 or fewer employees who received at least \\$5,000 in compensation from the employer for the preceding calendar year. In addition, the employer can’t maintain any other retirement plans.\n\nOnce your have decided on the type of plan for your company, you will have flexibility in choosing some of the plan’s features -- such as which employees can contribute to the plan and how much. Other features written into the plan are required by law. For instance, the plan document must describe how certain key functions are carried out, such as how contributions are deposited in the plan.\n\n### Arrange a trust fund for the plan’s assets\nA plan’s assets must be held in trust to assure that assets are used solely to benefit the participants and their beneficiaries. The trust must have at least one trustee to handle contributions, plan investments, and distributions to and from the 401(k) plan. Since the financial integrity of the plan depends on the trustee, this is one of the most important decisions you will make in establishing a 401(k) plan. If you set up your plan through insurance contracts, the contracts do not need to be held in trust.\n\n### Develop a recordkeeping system\nAn accurate recordkeeping system helps track and properly attribute contributions, earnings and losses, plan investments, expense and benefit distributions in participants’ accounts. If you have a contract administrator or financial institution assist in managing the plan, that entity typically will help in keeping the required records. In addition, a recordkeeping system will help you, your plan administrator, or financial provider prepare the plan’s annual return\/report that must be filed with the Federal government.\n\n### Provide plan information to employees\nAs you put your 401(k) plan in place, you must notify employees who are eligible to participate in the plan about your plan’s benefits and requirements. A summary plan description, or SPD, is the primary vehicle to inform participants and beneficiaries about the plan and how it operates. The SPD typically is created with the plan document. You will need to send it to all plan participants. In addition, you may want to provide your employees with information that emphasizes the advantages of joining your 401(k) plan. Employee perks - such as pre-tax contributions to a 401(k) plan (or tax-free distributions in the case of Roth 401(k)s), employer contributions (if you choose to make them), and compounded tax-deferred earnings - help highlight the advantages of participating in the plan.\n\nPage Last Reviewed or Updated: 16-Nov-2025\n\n- [Share](https:\/\/www.irs.gov\/retirement-plans\/irc-401k-plans-establishing-a-401k-plan)\n  - [Facebook](https:\/\/www.irs.gov\/#facebook)\n  - [Twitter](https:\/\/www.irs.gov\/#twitter)\n  - [Linkedin](https:\/\/www.irs.gov\/#linkedin)\n- Print\n\n## Footer Navigation\n- Our Agency\n  - [About IRS](https:\/\/www.irs.gov\/about-irs)\n  - [Careers](https:\/\/jobs.irs.gov\/)\n  - [Operations and Budget](https:\/\/www.irs.gov\/statistics\/soi-tax-stats-irs-operations-and-budget)\n  - [Tax Statistics](https:\/\/www.irs.gov\/statistics)\n  - [Help](https:\/\/www.irs.gov\/help\/let-us-help-you)\n  - [Find a Local Office](https:\/\/www.irs.gov\/help\/contact-your-local-irs-office)\n- Know Your Rights\n  - [Taxpayer Bill of Rights](https:\/\/www.irs.gov\/taxpayer-bill-of-rights)\n  - [Taxpayer Advocate Service](https:\/\/www.irs.gov\/taxpayer-advocate)\n  - [Independent Office of Appeals](https:\/\/www.irs.gov\/appeals)\n  - [Civil Rights](https:\/\/www.irs.gov\/about-irs\/protecting-taxpayer-civil-rights)\n  - [FOIA](https:\/\/www.irs.gov\/privacy-disclosure\/irs-freedom-of-information)\n  - [No FEAR Act Data](https:\/\/home.treasury.gov\/footer\/no-fear-act)\n  - [Reliance on Guidance](https:\/\/www.irs.gov\/newsroom\/general-overview-of-taxpayer-reliance-on-guidance-published-in-the-internal-revenue-bulletin-and-faqs)\n- Resolve an Issue\n  - [IRS Notices and Letters](https:\/\/www.irs.gov\/individuals\/understanding-your-irs-notice-or-letter)\n  - [Identity Theft](https:\/\/www.irs.gov\/identity-theft-central)\n  - [Tax scams](https:\/\/www.irs.gov\/help\/tax-scams)\n  - [Tax Fraud](https:\/\/www.irs.gov\/compliance\/criminal-investigation\/tax-fraud-alerts)\n  - [Criminal Investigation](https:\/\/www.irs.gov\/compliance\/criminal-investigation)\n  - [Whistleblower Office](https:\/\/www.irs.gov\/compliance\/whistleblower-office)\n- Languages\n  - [Español](https:\/\/www.irs.gov\/es)\n  - [中文 (简体)](https:\/\/www.irs.gov\/zh-hans)\n  - [中文 (繁體)](https:\/\/www.irs.gov\/zh-hant)\n  - [한국어](https:\/\/www.irs.gov\/ko)\n  - [Pусский](https:\/\/www.irs.gov\/ru)\n  - [Tiếng Việt](https:\/\/www.irs.gov\/vi)\n  - [Kreyòl ayisyen](https:\/\/www.irs.gov\/ht)\n  - [English](https:\/\/www.irs.gov\/)\n- Related Sites\n  - [U.S. Treasury](https:\/\/www.treasury.gov\/)\n  - [Treasury Inspector General for Tax Administration](https:\/\/www.treasury.gov\/tigta\/)\n  - [USA.gov](https:\/\/www.usa.gov\/)\n  - [USAspending.gov](https:\/\/www.usaspending.gov\/)\n  - [Vote.gov](https:\/\/vote.gov\/)\n\n[![Home](https:\/\/www.irs.gov\/themes\/custom\/pup_base\/IRS-Logo.svg)](https:\/\/www.irs.gov\/)\n\n## Subfooter\n- [Privacy Policy](https:\/\/www.irs.gov\/privacy-disclosure\/irs-privacy-policy)\n- [Accessibility](https:\/\/www.irs.gov\/accessibility)\n\n✓\n\nThanks for sharing\\!\n\n[AddToAny](https:\/\/www.addtoany.com\/ \"Share Buttons\")\n\n[More…](https:\/\/www.irs.gov\/retirement-plans\/irc-401k-plans-establishing-a-401k-plan#addtoany \"Show all\")","attrs_readable_markdown":"When you establish a 401(k) plan you must take certain basic actions. For instance, one of your decisions will be whether to set up the plan yourself or consult a professional or financial institution - such as a bank, mutual fund provider, or insurance company - to help you establish and maintain the plan.\n\n## Initial actions\nHere are four basic actions necessary to have a tax-advantaged 401(k) plan:\n\n- Adopt a written plan,\n- Arrange a trust fund for the plan’s assets,\n- Develop a recordkeeping system, and\n- Provide plan information to participants.\n### Adopt a written plan\nPlans begin with a written document that serves as the foundation for day-to-day plan operations. If you have hired someone to help with your plan, that person likely will provide it. If not, consider obtaining assistance from a financial institution or retirement plan professional. In either case, you are bound by the terms of the plan document.\n\nBefore beginning a plan document, however, you will need to decide on the type of 401(k) plan that is best for you - a traditional 401(k), a safe harbor 401(k), or a SIMPLE 401(k) plan.\n\nA **traditional 401(k) plan** offers the maximum flexibility of the three types of plans. Employers can choose to make contributions on behalf of all participants, match employees’ deferrals, or do both. These contributions can be subject to a vesting schedule (which provides that an employee’s right to employer contributions becomes nonforfeitable only after a period of time). In addition, a traditional 401(k) allows participants to make pre-tax contributions through payroll deductions. Annual testing ensures that benefits for rank-and-file employees are proportional to benefits for owners\/managers.\n\nA **safe harbor 401(k) plan** is similar to a traditional 401(k) plan, but, among other things, must provide for employer contributions that are fully vested when made. However, the safe harbor 401(k) is not subject to many of the complex tax rules that are associated with a traditional 401(k) plan, including annual nondiscrimination testing.\n\nAn **[automatic enrollment 401(k) plan PDF](https:\/\/www.irs.gov\/pub\/irs-pdf\/p4674.pdf \"1120 Publ 4674                           (PDF)\")** allows an employer to automatically deduct a fixed percentage or amount from an employee’s wages and contribute that amount to the retirement plan unless the employee has affirmatively chosen to contribute nothing or a different amount. These automatic enrollment contributions qualify as [elective deferrals](https:\/\/www.irs.gov\/retirement-plans\/plan-participant-employee\/retirement-plans-definitions \"Retirement plans definitions\").\n\n- [Revenue Ruling 2009-30 PDF](https:\/\/www.irs.gov\/pub\/irs-drop\/rr-09-30.pdf \"RR-2009-30\") demonstrates ways a 401(k) plan sponsor can include automatic contribution increases in its plan.\n- [Notice 2009-65 PDF](https:\/\/www.irs.gov\/pub\/irs-drop\/n-09-65.pdf \"n-09-65\") provides sample automatic enrollment plan language that a 401(k) plan sponsor can adopt with automatic IRS approval.\n\nThe traditional, safe harbor and automatic enrollment 401(k) plans are for employers of any size and can be combined with other retirement plans.\n\nA **[SIMPLE 401(k) plan](https:\/\/www.irs.gov\/retirement-plans\/choosing-a-retirement-plan-simple-401k-plan \"Choosing a retirement plan: SIMPLE 401k plan\")** was created so that small businesses could have an effective, cost-efficient way to offer retirement benefits to their employees. A SIMPLE 401(k) plan is not subject to the annual nondiscrimination tests that apply to the traditional plans. Similar to a safe harbor 401(k) plan, however, the employer is required to make employer contributions that are fully vested. This type of 401(k) plan is available to employers with 100 or fewer employees who received at least \\$5,000 in compensation from the employer for the preceding calendar year. In addition, the employer can’t maintain any other retirement plans.\n\nOnce your have decided on the type of plan for your company, you will have flexibility in choosing some of the plan’s features -- such as which employees can contribute to the plan and how much. Other features written into the plan are required by law. For instance, the plan document must describe how certain key functions are carried out, such as how contributions are deposited in the plan.\n\n### Arrange a trust fund for the plan’s assets\nA plan’s assets must be held in trust to assure that assets are used solely to benefit the participants and their beneficiaries. The trust must have at least one trustee to handle contributions, plan investments, and distributions to and from the 401(k) plan. Since the financial integrity of the plan depends on the trustee, this is one of the most important decisions you will make in establishing a 401(k) plan. If you set up your plan through insurance contracts, the contracts do not need to be held in trust.\n\n### Develop a recordkeeping system\nAn accurate recordkeeping system helps track and properly attribute contributions, earnings and losses, plan investments, expense and benefit distributions in participants’ accounts. If you have a contract administrator or financial institution assist in managing the plan, that entity typically will help in keeping the required records. In addition, a recordkeeping system will help you, your plan administrator, or financial provider prepare the plan’s annual return\/report that must be filed with the Federal government.\n\n### Provide plan information to employees\nAs you put your 401(k) plan in place, you must notify employees who are eligible to participate in the plan about your plan’s benefits and requirements. A summary plan description, or SPD, is the primary vehicle to inform participants and beneficiaries about the plan and how it operates. The SPD typically is created with the plan document. You will need to send it to all plan participants. In addition, you may want to provide your employees with information that emphasizes the advantages of joining your 401(k) plan. Employee perks - such as pre-tax contributions to a 401(k) plan (or tax-free distributions in the case of Roth 401(k)s), employer contributions (if you choose to make them), and compounded tax-deferred earnings - help highlight the advantages of participating in the plan.","meta_canonical":null}

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URL	https://www.irs.gov/retirement-plans/irc-401k-plans-establishing-a-401k-plan
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Meta Title	IRC 401(k) plans - Establishing a 401(k) plan \| Internal Revenue Service
Meta Description	The basic actions that must be taken to establish a 401(k) plan.
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Boilerpipe Text	When you establish a 401(k) plan you must take certain basic actions. For instance, one of your decisions will be whether to set up the plan yourself or consult a professional or financial institution - such as a bank, mutual fund provider, or insurance company - to help you establish and maintain the plan. Initial actions Here are four basic actions necessary to have a tax-advantaged 401(k) plan: Adopt a written plan, Arrange a trust fund for the plan’s assets, Develop a recordkeeping system, and Provide plan information to participants. Adopt a written plan Plans begin with a written document that serves as the foundation for day-to-day plan operations. If you have hired someone to help with your plan, that person likely will provide it. If not, consider obtaining assistance from a financial institution or retirement plan professional. In either case, you are bound by the terms of the plan document. Before beginning a plan document, however, you will need to decide on the type of 401(k) plan that is best for you - a traditional 401(k), a safe harbor 401(k), or a SIMPLE 401(k) plan. A traditional 401(k) plan offers the maximum flexibility of the three types of plans. Employers can choose to make contributions on behalf of all participants, match employees’ deferrals, or do both. These contributions can be subject to a vesting schedule (which provides that an employee’s right to employer contributions becomes nonforfeitable only after a period of time). In addition, a traditional 401(k) allows participants to make pre-tax contributions through payroll deductions. Annual testing ensures that benefits for rank-and-file employees are proportional to benefits for owners/managers. A safe harbor 401(k) plan is similar to a traditional 401(k) plan, but, among other things, must provide for employer contributions that are fully vested when made. However, the safe harbor 401(k) is not subject to many of the complex tax rules that are associated with a traditional 401(k) plan, including annual nondiscrimination testing. An automatic enrollment 401(k) plan PDF allows an employer to automatically deduct a fixed percentage or amount from an employee’s wages and contribute that amount to the retirement plan unless the employee has affirmatively chosen to contribute nothing or a different amount. These automatic enrollment contributions qualify as elective deferrals . Revenue Ruling 2009-30 PDF demonstrates ways a 401(k) plan sponsor can include automatic contribution increases in its plan. Notice 2009-65 PDF provides sample automatic enrollment plan language that a 401(k) plan sponsor can adopt with automatic IRS approval. The traditional, safe harbor and automatic enrollment 401(k) plans are for employers of any size and can be combined with other retirement plans. A SIMPLE 401(k) plan was created so that small businesses could have an effective, cost-efficient way to offer retirement benefits to their employees. A SIMPLE 401(k) plan is not subject to the annual nondiscrimination tests that apply to the traditional plans. Similar to a safe harbor 401(k) plan, however, the employer is required to make employer contributions that are fully vested. This type of 401(k) plan is available to employers with 100 or fewer employees who received at least $5,000 in compensation from the employer for the preceding calendar year. In addition, the employer can’t maintain any other retirement plans. Once your have decided on the type of plan for your company, you will have flexibility in choosing some of the plan’s features -- such as which employees can contribute to the plan and how much. Other features written into the plan are required by law. For instance, the plan document must describe how certain key functions are carried out, such as how contributions are deposited in the plan. Arrange a trust fund for the plan’s assets A plan’s assets must be held in trust to assure that assets are used solely to benefit the participants and their beneficiaries. The trust must have at least one trustee to handle contributions, plan investments, and distributions to and from the 401(k) plan. Since the financial integrity of the plan depends on the trustee, this is one of the most important decisions you will make in establishing a 401(k) plan. If you set up your plan through insurance contracts, the contracts do not need to be held in trust. Develop a recordkeeping system An accurate recordkeeping system helps track and properly attribute contributions, earnings and losses, plan investments, expense and benefit distributions in participants’ accounts. If you have a contract administrator or financial institution assist in managing the plan, that entity typically will help in keeping the required records. In addition, a recordkeeping system will help you, your plan administrator, or financial provider prepare the plan’s annual return/report that must be filed with the Federal government. Provide plan information to employees As you put your 401(k) plan in place, you must notify employees who are eligible to participate in the plan about your plan’s benefits and requirements. A summary plan description, or SPD, is the primary vehicle to inform participants and beneficiaries about the plan and how it operates. The SPD typically is created with the plan document. You will need to send it to all plan participants. In addition, you may want to provide your employees with information that emphasizes the advantages of joining your 401(k) plan. Employee perks - such as pre-tax contributions to a 401(k) plan (or tax-free distributions in the case of Roth 401(k)s), employer contributions (if you choose to make them), and compounded tax-deferred earnings - help highlight the advantages of participating in the plan.
Markdown	[Skip to main content](https://www.irs.gov/retirement-plans/irc-401k-plans-establishing-a-401k-plan#main-content) ![](https://www.irs.gov/themes/custom/pup_base/images/us_flag_small.png) An official website of the United States government Here's how you know Here's how you know ![](https://www.irs.gov/themes/custom/pup_base/images/icon-dot-gov.svg) Official websites use .gov A .gov website belongs to an official government organization in the United States. ![](https://www.irs.gov/themes/custom/pup_base/images/icon-https.svg) Secure .gov websites use HTTPS A lock (![Locked padlock icon](https://www.irs.gov/themes/custom/pup_base/images/lock.svg)) or https:// means you've safely connected to the .gov website. Share sensitive information only on official, secure websites. 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IRC 401(k) plans - Establishing a 401(k) plan # IRC 401(k) plans - Establishing a 401(k) plan ### More In Retirement Plans - [IRAs](https://www.irs.gov/retirement-plans/individual-retirement-arrangements-iras "IRAs") - [Types of retirement plans](https://www.irs.gov/retirement-plans/plan-sponsor/types-of-retirement-plans "Types of retirement plans") - [Required minimum distributions](https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-required-minimum-distributions-rmds "Required minimum distributions") - [Published guidance](https://www.irs.gov/retirement-plans/published-guidance "Published guidance") - [Forms and publications](https://www.irs.gov/retirement-plans/retirement-plan-forms-and-publications "Forms and publications") - [Operate a retirement plan](https://www.irs.gov/retirement-plans/operate-a-retirement-plan "Operate a retirement plan") - [News](https://www.irs.gov/retirement-plans/newsletters "News") - [Topic index](https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics "Topic index") When you establish a 401(k) plan you must take certain basic actions. For instance, one of your decisions will be whether to set up the plan yourself or consult a professional or financial institution - such as a bank, mutual fund provider, or insurance company - to help you establish and maintain the plan. ## Initial actions Here are four basic actions necessary to have a tax-advantaged 401(k) plan: - Adopt a written plan, - Arrange a trust fund for the plan’s assets, - Develop a recordkeeping system, and - Provide plan information to participants. ### Adopt a written plan Plans begin with a written document that serves as the foundation for day-to-day plan operations. If you have hired someone to help with your plan, that person likely will provide it. If not, consider obtaining assistance from a financial institution or retirement plan professional. In either case, you are bound by the terms of the plan document. Before beginning a plan document, however, you will need to decide on the type of 401(k) plan that is best for you - a traditional 401(k), a safe harbor 401(k), or a SIMPLE 401(k) plan. A traditional 401(k) plan offers the maximum flexibility of the three types of plans. Employers can choose to make contributions on behalf of all participants, match employees’ deferrals, or do both. These contributions can be subject to a vesting schedule (which provides that an employee’s right to employer contributions becomes nonforfeitable only after a period of time). In addition, a traditional 401(k) allows participants to make pre-tax contributions through payroll deductions. Annual testing ensures that benefits for rank-and-file employees are proportional to benefits for owners/managers. A safe harbor 401(k) plan is similar to a traditional 401(k) plan, but, among other things, must provide for employer contributions that are fully vested when made. However, the safe harbor 401(k) is not subject to many of the complex tax rules that are associated with a traditional 401(k) plan, including annual nondiscrimination testing. An [automatic enrollment 401(k) plan PDF](https://www.irs.gov/pub/irs-pdf/p4674.pdf "1120 Publ 4674 (PDF)") allows an employer to automatically deduct a fixed percentage or amount from an employee’s wages and contribute that amount to the retirement plan unless the employee has affirmatively chosen to contribute nothing or a different amount. These automatic enrollment contributions qualify as [elective deferrals](https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-plans-definitions "Retirement plans definitions"). - [Revenue Ruling 2009-30 PDF](https://www.irs.gov/pub/irs-drop/rr-09-30.pdf "RR-2009-30") demonstrates ways a 401(k) plan sponsor can include automatic contribution increases in its plan. - [Notice 2009-65 PDF](https://www.irs.gov/pub/irs-drop/n-09-65.pdf "n-09-65") provides sample automatic enrollment plan language that a 401(k) plan sponsor can adopt with automatic IRS approval. The traditional, safe harbor and automatic enrollment 401(k) plans are for employers of any size and can be combined with other retirement plans. A [SIMPLE 401(k) plan](https://www.irs.gov/retirement-plans/choosing-a-retirement-plan-simple-401k-plan "Choosing a retirement plan: SIMPLE 401k plan") was created so that small businesses could have an effective, cost-efficient way to offer retirement benefits to their employees. A SIMPLE 401(k) plan is not subject to the annual nondiscrimination tests that apply to the traditional plans. Similar to a safe harbor 401(k) plan, however, the employer is required to make employer contributions that are fully vested. This type of 401(k) plan is available to employers with 100 or fewer employees who received at least \$5,000 in compensation from the employer for the preceding calendar year. In addition, the employer can’t maintain any other retirement plans. Once your have decided on the type of plan for your company, you will have flexibility in choosing some of the plan’s features -- such as which employees can contribute to the plan and how much. Other features written into the plan are required by law. For instance, the plan document must describe how certain key functions are carried out, such as how contributions are deposited in the plan. ### Arrange a trust fund for the plan’s assets A plan’s assets must be held in trust to assure that assets are used solely to benefit the participants and their beneficiaries. The trust must have at least one trustee to handle contributions, plan investments, and distributions to and from the 401(k) plan. Since the financial integrity of the plan depends on the trustee, this is one of the most important decisions you will make in establishing a 401(k) plan. If you set up your plan through insurance contracts, the contracts do not need to be held in trust. ### Develop a recordkeeping system An accurate recordkeeping system helps track and properly attribute contributions, earnings and losses, plan investments, expense and benefit distributions in participants’ accounts. If you have a contract administrator or financial institution assist in managing the plan, that entity typically will help in keeping the required records. In addition, a recordkeeping system will help you, your plan administrator, or financial provider prepare the plan’s annual return/report that must be filed with the Federal government. ### Provide plan information to employees As you put your 401(k) plan in place, you must notify employees who are eligible to participate in the plan about your plan’s benefits and requirements. A summary plan description, or SPD, is the primary vehicle to inform participants and beneficiaries about the plan and how it operates. The SPD typically is created with the plan document. You will need to send it to all plan participants. In addition, you may want to provide your employees with information that emphasizes the advantages of joining your 401(k) plan. Employee perks - such as pre-tax contributions to a 401(k) plan (or tax-free distributions in the case of Roth 401(k)s), employer contributions (if you choose to make them), and compounded tax-deferred earnings - help highlight the advantages of participating in the plan. Page Last Reviewed or Updated: 16-Nov-2025 - [Share](https://www.irs.gov/retirement-plans/irc-401k-plans-establishing-a-401k-plan) - [Facebook](https://www.irs.gov/#facebook) - [Twitter](https://www.irs.gov/#twitter) - [Linkedin](https://www.irs.gov/#linkedin) - Print ## Footer Navigation - Our Agency - [About IRS](https://www.irs.gov/about-irs) - [Careers](https://jobs.irs.gov/) - [Operations and Budget](https://www.irs.gov/statistics/soi-tax-stats-irs-operations-and-budget) - [Tax Statistics](https://www.irs.gov/statistics) - [Help](https://www.irs.gov/help/let-us-help-you) - [Find a Local Office](https://www.irs.gov/help/contact-your-local-irs-office) - Know Your Rights - [Taxpayer Bill of Rights](https://www.irs.gov/taxpayer-bill-of-rights) - [Taxpayer Advocate Service](https://www.irs.gov/taxpayer-advocate) - [Independent Office of Appeals](https://www.irs.gov/appeals) - [Civil Rights](https://www.irs.gov/about-irs/protecting-taxpayer-civil-rights) - [FOIA](https://www.irs.gov/privacy-disclosure/irs-freedom-of-information) - [No FEAR Act Data](https://home.treasury.gov/footer/no-fear-act) - [Reliance on Guidance](https://www.irs.gov/newsroom/general-overview-of-taxpayer-reliance-on-guidance-published-in-the-internal-revenue-bulletin-and-faqs) - Resolve an Issue - [IRS Notices and Letters](https://www.irs.gov/individuals/understanding-your-irs-notice-or-letter) - [Identity Theft](https://www.irs.gov/identity-theft-central) - [Tax scams](https://www.irs.gov/help/tax-scams) - [Tax Fraud](https://www.irs.gov/compliance/criminal-investigation/tax-fraud-alerts) - [Criminal Investigation](https://www.irs.gov/compliance/criminal-investigation) - [Whistleblower Office](https://www.irs.gov/compliance/whistleblower-office) - Languages - [Español](https://www.irs.gov/es) - [中文 (简体)](https://www.irs.gov/zh-hans) - [中文 (繁體)](https://www.irs.gov/zh-hant) - [한국어](https://www.irs.gov/ko) - [Pусский](https://www.irs.gov/ru) - [Tiếng Việt](https://www.irs.gov/vi) - [Kreyòl ayisyen](https://www.irs.gov/ht) - [English](https://www.irs.gov/) - Related Sites - [U.S. Treasury](https://www.treasury.gov/) - [Treasury Inspector General for Tax Administration](https://www.treasury.gov/tigta/) - [USA.gov](https://www.usa.gov/) - [USAspending.gov](https://www.usaspending.gov/) - [Vote.gov](https://vote.gov/) [![Home](https://www.irs.gov/themes/custom/pup_base/IRS-Logo.svg)](https://www.irs.gov/) ## Subfooter - [Privacy Policy](https://www.irs.gov/privacy-disclosure/irs-privacy-policy) - [Accessibility](https://www.irs.gov/accessibility) ✓ Thanks for sharing\! 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Readable Markdown	When you establish a 401(k) plan you must take certain basic actions. For instance, one of your decisions will be whether to set up the plan yourself or consult a professional or financial institution - such as a bank, mutual fund provider, or insurance company - to help you establish and maintain the plan. ## Initial actions Here are four basic actions necessary to have a tax-advantaged 401(k) plan: - Adopt a written plan, - Arrange a trust fund for the plan’s assets, - Develop a recordkeeping system, and - Provide plan information to participants. ### Adopt a written plan Plans begin with a written document that serves as the foundation for day-to-day plan operations. If you have hired someone to help with your plan, that person likely will provide it. If not, consider obtaining assistance from a financial institution or retirement plan professional. In either case, you are bound by the terms of the plan document. Before beginning a plan document, however, you will need to decide on the type of 401(k) plan that is best for you - a traditional 401(k), a safe harbor 401(k), or a SIMPLE 401(k) plan. A traditional 401(k) plan offers the maximum flexibility of the three types of plans. Employers can choose to make contributions on behalf of all participants, match employees’ deferrals, or do both. These contributions can be subject to a vesting schedule (which provides that an employee’s right to employer contributions becomes nonforfeitable only after a period of time). In addition, a traditional 401(k) allows participants to make pre-tax contributions through payroll deductions. Annual testing ensures that benefits for rank-and-file employees are proportional to benefits for owners/managers. A safe harbor 401(k) plan is similar to a traditional 401(k) plan, but, among other things, must provide for employer contributions that are fully vested when made. However, the safe harbor 401(k) is not subject to many of the complex tax rules that are associated with a traditional 401(k) plan, including annual nondiscrimination testing. An [automatic enrollment 401(k) plan PDF](https://www.irs.gov/pub/irs-pdf/p4674.pdf "1120 Publ 4674 (PDF)") allows an employer to automatically deduct a fixed percentage or amount from an employee’s wages and contribute that amount to the retirement plan unless the employee has affirmatively chosen to contribute nothing or a different amount. These automatic enrollment contributions qualify as [elective deferrals](https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-plans-definitions "Retirement plans definitions"). - [Revenue Ruling 2009-30 PDF](https://www.irs.gov/pub/irs-drop/rr-09-30.pdf "RR-2009-30") demonstrates ways a 401(k) plan sponsor can include automatic contribution increases in its plan. - [Notice 2009-65 PDF](https://www.irs.gov/pub/irs-drop/n-09-65.pdf "n-09-65") provides sample automatic enrollment plan language that a 401(k) plan sponsor can adopt with automatic IRS approval. The traditional, safe harbor and automatic enrollment 401(k) plans are for employers of any size and can be combined with other retirement plans. A [SIMPLE 401(k) plan](https://www.irs.gov/retirement-plans/choosing-a-retirement-plan-simple-401k-plan "Choosing a retirement plan: SIMPLE 401k plan") was created so that small businesses could have an effective, cost-efficient way to offer retirement benefits to their employees. A SIMPLE 401(k) plan is not subject to the annual nondiscrimination tests that apply to the traditional plans. Similar to a safe harbor 401(k) plan, however, the employer is required to make employer contributions that are fully vested. This type of 401(k) plan is available to employers with 100 or fewer employees who received at least \$5,000 in compensation from the employer for the preceding calendar year. In addition, the employer can’t maintain any other retirement plans. Once your have decided on the type of plan for your company, you will have flexibility in choosing some of the plan’s features -- such as which employees can contribute to the plan and how much. Other features written into the plan are required by law. For instance, the plan document must describe how certain key functions are carried out, such as how contributions are deposited in the plan. ### Arrange a trust fund for the plan’s assets A plan’s assets must be held in trust to assure that assets are used solely to benefit the participants and their beneficiaries. The trust must have at least one trustee to handle contributions, plan investments, and distributions to and from the 401(k) plan. Since the financial integrity of the plan depends on the trustee, this is one of the most important decisions you will make in establishing a 401(k) plan. If you set up your plan through insurance contracts, the contracts do not need to be held in trust. ### Develop a recordkeeping system An accurate recordkeeping system helps track and properly attribute contributions, earnings and losses, plan investments, expense and benefit distributions in participants’ accounts. If you have a contract administrator or financial institution assist in managing the plan, that entity typically will help in keeping the required records. In addition, a recordkeeping system will help you, your plan administrator, or financial provider prepare the plan’s annual return/report that must be filed with the Federal government. ### Provide plan information to employees As you put your 401(k) plan in place, you must notify employees who are eligible to participate in the plan about your plan’s benefits and requirements. A summary plan description, or SPD, is the primary vehicle to inform participants and beneficiaries about the plan and how it operates. The SPD typically is created with the plan document. You will need to send it to all plan participants. In addition, you may want to provide your employees with information that emphasizes the advantages of joining your 401(k) plan. Employee perks - such as pre-tax contributions to a 401(k) plan (or tax-free distributions in the case of Roth 401(k)s), employer contributions (if you choose to make them), and compounded tax-deferred earnings - help highlight the advantages of participating in the plan.
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