BPP Rolls Out New Small Entrepreneurs 401(k) Plan

July 28, 2003 (PLANSPONSOR.com) - BSW Benefit Plans Plus, LLC (BPP) has rolled out a new retirement solution tailored for business owners with no employees other than a spouse.

The Small Business Owner (SBO) 401k-Plan offers unlimited investment options and a choice between self-directed or professional fund management at the financial institution of the participant’s choosing, according to a news release.

The so-called Individual (k) plan is unique in that it is designed explicitly for owner-only businesses and businesses with part-time or seasonal employees that can be excluded from participation in traditional 401(k) plans in accordance with federal law. The product enables small-business owners to contribute significant amounts of income, in some cases more than twice as much as they are allowed under traditional small-business plan regulations.

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The Economic Growth and Tax Relief Reconciliation Act (EGTRRA) of 2001 lifted many of the limits on the amount and deductibility of contributions for 401(k) plans. Prior to that, single-owner businesses were better off saving for retirement in other types of plans. However, EGTRRA effectively put 401(k) plans on an equal—and, in some cases, better—footing compared with other tax-deferred savings plans for sole proprietorships—giving life to a “new” product, the “Individual (k)” or “solo (k).”

BPP Particulars

The BPP plan also allows individuals to squirrel away up to $40,000 annually by maximizing salary deferrals and employers contributions for 2003.   Participants age 50 and older can tack on an extra $2,000 to that annual contribution amount.

BPP is also offering a variety of resources at their Web site ( www.bpp401k.com ) to assist participants and financial advisors.   Those include:

  • A free plan analysis
  • Comparison of a SEP verses the SBO-401k-Plan
  • Online application

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