401(k) For One^SM

With the passage of EGTRRA (Economic Growth and Tax Relief Reconciliation Act) in 2001, it now makes sense for "owner-only" businesses to institute a 401(k) Plan. Prior to this, owner-only businesses were at a disadvantage because while a traditional pension plan was too complicated and expensive to implement and maintain, other alternatives such as SEP and SIMPLE IRAs did not offer high enough contribution limits. With California Pensions’ 401(k) For One^SM, no matter what your business structure, it is possible for owner-only businesses to contribute up to $44,000 toward your retirement savings.

How much can I contribute to this Plan?

Contributions can come from two sources -- salary deferral of $13,000 or 100% of compensation, and a profit sharing contribution of up to 25% of compensation. Combining both sources, you can contribute up to $41,000. Additionally, if you are at least 50 years of age, you can make additional catch-up contribution of $3,000 for 2004.

The difference in contribution limits for various plans can be quite significant. Maximum funding limits for 2004 under various plans are as follows:

How is my money invested?

Your assets will be invested through our multi-fund trading platform, Matrix Settlement & Clearance Services. Through this platform, you have the option to choose from over 25 fund families. You can choose from two investment menu options each with different annual administrative fee. Refer to the downloadable brochure to see which fund families are available under each option.

Option to consolidate all other retirement accounts

Another great benefit to consider is that if you currently have other forms of retirement accounts such as an IRA, 403(b), SEP-IRA and/or other qualified retirement accounts, you can consolidate them all under your 401(k) For One^SM.

What are my costs and fees?

There is a $100 one time setup fee and $150 annual administrative fee (for those who choose investment Option I) and $200 annual administrative fee (for those who choose investment Option II).

Is there an annual compliance requirement?

Unlike a conventional 401(k) plan, you need not file a form 5500 nor is the plan subject to annual discrimination testing. However, once the plan assets exceed $100,000, or if you hire full time employees, your plan must be converted to a regular 401(k) plan that requires more extensive administration and recordkeeping in order to be in compliance with government regulations. California Pensions can help you with this transition.

California Pensions makes sure that minimal work is required for our clients to open an account. Following is a very simple process involved: