Retirement Plan Comparison Chart
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1Comparison Chart of Retirement Plans
Maximum Annual
Allows for Individual
Mandatory Employer
Retirement Plan
Summary:
Key Benefit:
Drawbacks:
Contribution per
Vesting:
Voluntary Deferral:
Contributions:
Participant:
Yes, employee can
The employer makes
Non‐qualified plan that
Employee can defer $5,500
Easy to set up and
Contribution limits are
decided how much to
contributions in behalf of
Payroll deduction IRA
allows for employee
plus a $1,000 catch‐up at
Always 100% vested.
maintain.
really low.
contribute up to the
the employees through
deferrals only.
age 50+ (2013).
deferrals limits.
payroll deduction.
Non‐qualified plan that
Easy to setup and
Employee can defer
Employer contributions
Yes, employee can
Yes, employer must make
allows for both
maintain. Allows for
$12,000 plus a $2,500 catch‐
are mandatory even if
decided how much to
matching contribution, or
SIMPLE IRA Plan
employee and
employee and
up contribution at age 50+
Always 100% vested.
no profit and low
contribute up to the
contribute 2% of each
employer
employer
(2013) plus the employer
contribution limits.
deferrals limits.
employee's compensation.
contributions.
contributions.
match.
Easy to setup and
Non‐qualified plan that
No, employer can decided
Lesser of 25% of
maintain, but allows
Does not allow for
No, only employer can
Simplified Employee Pension (SEP)
allows for employer
each year if they will make
compensation, or $51,000
Always 100% vested.
for higher
employee deferrals.
contribute.
contributions only.
contributions.
per participant (2013).
contributions.
Employee can defer
Qualified plan that
Yes, employee can
No, employer
$17,500 plus $5,500 catch‐
Employee deferrals are
allows for flexible
Allows employees to
Requires annual filing
decided how much to
contributions however,
up at age 50+ (2013).
always 100% vested,
401(k) Plan
employer contributions
defer more of their
with moderate
contribute up to the
must be "substantial and
Employee deferrals plus
employer contributions
and employee
compensation.
administrative costs.
deferrals limits.
reoccurring".
employer match are
may vest over time.
deferrals.
capped at $51,000 (2013).
Qualified plan that will
Allows for
Requires annual filing
Annual contributions are
guarantee the
No, only employer can
Can range from $5,000 to
Defined Benefit Pension Plan
contributions in excess
with high
determined each year by
May vest over time.
participant a stated
contribute.
$250,000+ per participant.
above $51,000.
administrative costs.
the plan actuary.
benefit for their life.
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