BISYS will support the BNY Securities Group member’s plan by providing administrative services such as product training, plan installation services, client-branded marketing and educational materials, employer kits, IRS-approved prototype plan documents, and dedicated Web sites and tools for plan participants. This comes in addition to recordkeeping services provided by BISYS, according to a news release.
The Pershing plan also allows individuals to squirrel away up to $40,000 annually by maximizing salary deferrals and employer’s contributions for 2003. Participants age 50 and older can tack on an extra $2,000 to that annual contribution amount.
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 who 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.
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 equaland, in some cases, betterfooting compared with other tax-deferred savings plans for sole proprietorshipsgiving life to a “new” product, the “Individual (k)” or “solo (k).”