As our valued client, Bradley Wealth always strives to provide you with the best plan designs, utmost service in administration and compliance. As such, please review the following information in this e-mail carefully so that you may plan accordingly for 2016. The Internal Revenue Service (IRS) announced recently the contribution limits for retirement plan participants for 2016. In this regard, please note the following:

• The elective deferral contribution limit for employees who participate in 401(k) and/or 403(b) plans remains unchanged at $18,000.
• The catch-up contribution limit for employees aged 50 and over who participate in 401(k) and/or 403(b) plans remains unchanged at $6,000.
• The 415 limit on total contributions to a defined contribution plan remains unchanged at $53,000. This amount consists of the total of both employer and employee contributions. For employees who are at least age 50 and who participate in a 401(k) plan and/or a 403(b) plan, this amount increases to $59,000 with the $6,000 catch-up amount added in.
• The 415 limit on total benefits that may be provided in a defined benefit plan on an annual basis remains unchanged at $210,000.
• The annual compensation limit for plan purposes remains unchanged at $265,000.

Other Deadlines

As you may be aware, our firm specializes in designing and administering customized retirement plans which are suited to maximize contributions and tax deductions to benefit owners/key employees. Contrary to what many believe, there is no “one-size-fits-all” retirement plan. Every employer has a different company structure than the next. The one-size-fits-all strategy is suited for a “cookie-cutter” environment and not beneficial for the owner and key employees. Our prowess is in working directly with our clients to provide a custom design which best fits their needs and company structure. We utilize all areas of the Internal Revenue Code sections in order to design the best available plan tailored to your (or your client’s) specific retirement needs and goals. Our plan design options include defined benefit, cash balance, 401(k) only, 401(k) combined with profit sharing, defined benefit/cash balance combined with 401(k) profit sharing plans, etc. Our 401(k) designs generally include a safe harbor provision which, depending on the design, allows the key employees to defer at the maximum level. You should note that an employer who currently does not maintain a 401(k) plan can still establish a 401(k) plan for 2015 now and have employees maximize their contributions at the $53,000 (or, if at least age 50 in 2015, $59,000) limit for 2015. If you are interested in establishing a 401(k) plan for 2015 in order to maximize contributions, please contact us for a proposal as soon as possible. Following are certain deadlines to implement some plans:

• For an existing 401(k) plan that wishes to convert to safe harbor in 2016, the safe harbor notices must be distributed to employees by December 1, 2015.
• For a start-up 401(k) in 2015, the deadline to execute a document and process payroll recording the salary deferrals is December 31, 2015.
• For a start-up 401(k) in 2015, with safe harbor in 2016, the safe harbor notices must be distributed to employees by December 1, 2015 and payroll must be processed recording salary deferrals for 2015 no later than December 31, 2015.

In general, for all plans which will be effective for 2015, the legal documents we prepare must be executed by December 31, 2015. Bradley Wealth values your continued business and looks forward to providing the same best-in-class service you expect for 2016. Should you have any questions or comments, please do not hesitate to contact us.]]>