Brendon, the owner of Medical Testing Corp is interested in adopting a retirement plan. He does not have experience in this area, but he has been "reading up" on options. He has come to you to provide a contribution comparison of using a SEP plan, SIMPLE plan or 401K plan for his company. Brendon wants you to assume he is going to MAXIMIZE the amount of funds he can personally contribute to the plan (within the rules of course) from both his own salary deferrals and any company contribution, while at the same time, restricting the participation in the plan to EXCLUDE the most employees as the rules allow. Assume each employee is intending to contribute 6% of their salary/earnings when able. Assume Medical Testing Corp. will match 3% when able. Assume ALL employees have been with Medical Testing Corp. for 3+ years Employee Status Age in 2020 W-2 income Brendon Betty Todd Nancy Matthew Owner Manager Sales Administration Son of Brendon $200,000 $100,000 $100,000 $100,000 $ 70,000 33 5 additional Employees Rank and file 25-45 @ $50 k avg. salary each 3 part-time Employees part time 18, 22, 24 750 hrs. @$12/hr. each For this Case, please provide a breakdown of: The contribution to the retirement plan from each employee, for each of the 3 plan option proposals. The contribution from Medical Testing Corp. to each employee that would be credited for each of the 3 plan option proposals. Clearly identify ANY ineligible employees for each of the 3 plan option proposals. Clearly identify any ADP testing considerations when appropriate. Brendon, the owner of Medical Testing Corp is interested in adopting a retirement plan. He does not have experience in this area, but he has been "reading up" on options. He has come to you to provide a contribution comparison of using a SEP plan, SIMPLE plan or 401K plan for his company. Brendon wants you to assume he is going to MAXIMIZE the amount of funds he can personally contribute to the plan (within the rules of course) from both his own salary deferrals and any company contribution, while at the same time, restricting the participation in the plan to EXCLUDE the most employees as the rules allow. Assume each employee is intending to contribute 6% of their salary/earnings when able. Assume Medical Testing Corp. will match 3% when able. Assume ALL employees have been with Medical Testing Corp. for 3+ years Employee Status Age in 2020 W-2 income Brendon Betty Todd Nancy Matthew Owner Manager Sales Administration Son of Brendon $200,000 $100,000 $100,000 $100,000 $ 70,000 33 5 additional Employees Rank and file 25-45 @ $50 k avg. salary each 3 part-time Employees part time 18, 22, 24 750 hrs. @$12/hr. each For this Case, please provide a breakdown of: The contribution to the retirement plan from each employee, for each of the 3 plan option proposals. The contribution from Medical Testing Corp. to each employee that would be credited for each of the 3 plan option proposals. Clearly identify ANY ineligible employees for each of the 3 plan option proposals. Clearly identify any ADP testing considerations when appropriate
