Tax Exempt and Government Entities
                        EMPLOYEE PLANS

                    Plan Feature Comparison Chart,

n  What is the  
   maximum annual  
   contribution?

n  Which plans     Choose
   offer catch-up  
                                                                 ,
   contributions?    a Retirement Plan

n  What are the  
   minimum  
   employee         n   Plans for employees of tax-exempt  
   coverage  
                    and government entities (schools,  
   requirements?

                    hospitals, churches, charities),
n  When do  
   distributions  
   begin?           n   Highlights of eight types of retirement  

                    plans — noting latest tax laws specific  

                    to each plan,

ESTABLISHING A RETIREMENT PLAN ,

Experts estimate that in the American workforce  
as a whole, workers will need 70 to 90 percent of their pre-retirement  
income to maintain their current standard of living when they stop  
working. Lower income earners may need more than 90 percent. Among  
these workers 25-64 years of age, a little more than half are participants  
in an employer-sponsored retirement plan.

Advantages of Having a Retirement Plan,

By starting a retirement savings plan, you will help your employees save for the future,  
and you will help secure your own retirement. Offering a retirement plan may also help 
you attract and retain better qualified employees.

Tax advantages have made it more appealing than ever to establish and contribute to  
a retirement plan.

Tax Advantages:

n  Higher contribution limits that allow employees and employers to contribute larger 
   amounts to retirement plans.

n  Catch-up rules that allow employees age 50 and over to set aside additional amounts.

n  Increased portability of retirement money.

n  In some plans, employees can invest a certain amount of their salary before it is taxed.

n  A tax credit, known as the Retirement Savings Contributions Credit, is available for  
   eligible contributions to a retirement plan. This credit could reduce federal income tax 
   up to 50 cents on the dollar. 

n  Money in the retirement program grows tax-free.

Choose a Retirement Plan,

The most basic retirement plan is an Individual Retirement Arrangement (IRA). Private-
sector employers (for-profit and not-for-profit) and government employers can offer  
savings plans that use IRAs to hold savings contributions.  

IRA-based plans include Payroll Deduction IRAs, Simplified Employee Pension plans 
(SEPs), and Savings Incentive Match Plan for Employees of Small Employers (SIMPLE) 

ESTABLISHING A RETIREMENT PLAN ,

               IRA plans. In these plans, and also with 401(k), 403(b) and 457(b) plans, the ultimate 
               retirement benefits depend on the dollar amount accumulated in the employee’s 
               account.  

               A defined benefit plan promises a specific benefit at retirement — $1,000 a month,  
               for example. The amount of this benefit is often based on a set percentage of pay  
               multiplied by the number of years the employee worked for the employer offering  
               the plan.

               Retirement Plan Correction Programs,

               The IRS has programs structured to provide financial incentives for finding and  
               correcting mistakes earlier rather than later. In fact, many mistakes can be corrected 
               easily, without penalty and without notifying the IRS.

               The IRS system of retirement plan correction programs, the Employee Plans 
               Compliance Resolution System (EPCRS), helps business owners protect participant 
               benefits and keep their plans within the law. EPCRS includes:

               Self-Correction Program — Find and correct a mistake before an audit.

               Voluntary Correction Program — Correct your plan’s mistakes with help from the IRS.

               Audit Closing Agreement Program — If the IRS audits your plan and finds an error, 
               you can still correct the problem. However, the fee will be larger than if you had found 
               and fixed the error yourself, or brought it in voluntarily.

   COMPARE RETIREMENT PLANS                ,

Plan Feature Comparison Chart,

Starting with the brief summary table below, find the plans that fit you and your employees best.  
Then click on the plan tabs to view and compare the complete details on each plan.  

Sponsor/                             
Eligible Employer,                  Key Advantage,                             Plans to Consider,

                                                                                                    LEARN 
n  Any employer,,                   n  easy to set up and maintain,            Payroll Deduction    MORE
                                                                               IRA,

                                                                                                    LEARN 
n  Any employer,                    n  easy to set up and maintain,            SEP,                 MORE

                                                                                                    LEARN 
n  Employers with 100 or fewer      n  salary reduction plan with little       SIMPLE IRA Plan,     MORE
   employees that do not currently     administrative paperwork,
   maintain another plan,

                                                                                                    LEARN 
n  Any non-government employer,     n  permits high level of salary deferrals  401(k),              MORE
                                       by employees,
n  Governments, only if plan was  
   established prior to May 1986,   n  may include designated Roth program,

                                                                                                    LEARN 
n  Public education employers,      n  permits high level of salary deferrals  403(b),              MORE
                                       by employees,
n  501(c)(3) organizations,
                                    n  may include designated Roth program ,

                                                                                                    LEARN 
n  State and local governments,     n  permits high level of salary deferrals  457(b) Governmental, MORE
                                       by employees,
                                    n  may include designated Roth program ,

                                                                                                    LEARN 
n  Any tax-exempt organization,     n  permits high level of salary deferrals  457(b) Tax-Exempt    MORE
                                       by employees ,                          Organization  ,
                                                                               (Non-Church) ,
                                                                                                    LEARN 
n  Any employer                     n  provides a fixed, pre-established       Defined Benefit      MORE
                                       benefit for employees,

                                 ,
Payroll Deduction IRA

Sponsor/Eligible Employer, n  any employer,

Key Advantage,             n  easy to set up and maintain,

Employer’s Role,           n  arrange for employees to make payroll deduction contributions,
                           n  transmit contributions for employees to IRA,
                           n  no annual filing requirement,

Contributors to the Plan,  n  employee can decide how much to contribute,

Maximum Annual             n  employee: $5,500 for 2015,
Contribution*  
(per participant) ,

Catch-Up Contributions*,   n  age 50 or over—additional employee contribution - $1,000 for 2015,

Minimum Employee           n  should be made available to all employees,
Coverage Requirement,

Withdrawals, Loans,        n  withdrawals permitted any time subject to federal income taxes,
and Distributions,         n  subject to 10% additional tax if before age 59½,
                           n  must start receiving distributions by April 1 of the year following attainment  
                              of age 70½ (special rules apply to Roth IRAs),
                           n  loans are not permitted from IRAs,

Rollovers/Transfers,       n  rollovers permitted from one IRA to another and to an eligible retirement plan  
                              (special rules apply to Roth IRAs),

Vesting,                   n  contributions are immediately 100% vested,

Employee Plans             n  no,
Compliance Resolution 
System (EPCRS),

                           * See www.irs.gov/retirement for annual updates,

                            BACK  to Plan Feature Comparison Chart

,
SEP

Sponsor/Eligible Employer, n  any employer,

Key Advantage,             n  easy to set up and maintain,

Employer’s Role,           n  set up plan—employer may use Form 5305-SEP,
                           n  transmit contributions for employees to SEP-IRA,
                           n  generally, no annual filing requirement,
                           n  bank or financial institution handles most of the paperwork,

Contributors to the Plan,  n  employer can decide whether to make contributions year-to-year,
                           n  only employer contributes,

Maximum Annual             n  up to 25% of compensation but no more than $53,000 for 2015    ,
Contribution*  
(per participant) ,

Catch-Up Contributions,    n  N/A,

Minimum Employee           n  must be offered to all employees who are at least 21 years of age, employed by the 
Coverage Requirement,         employer for 3 of the last 5 years, and had compensation of at least $600 for 2015,

Withdrawals, Loans,        n  withdrawals permitted any time subject to federal income taxes,
and Distributions,         n  subject to 10% additional tax if before age 59½,
                           n  must start receiving distributions by April 1 of the year following attainment of  
                              age 70½,
                           n  loans are not permitted from SEP-IRAs,

Rollovers/Transfers,       n  rollovers permitted from one IRA to another and to an eligible retirement plan  ,

Vesting,                   n  contributions are immediately 100% vested,

Employee Plans             n  yes,
Compliance Resolution 
System (EPCRS),

                           * See www.irs.gov/retirement for annual updates,

                            BACK    to Plan Feature Comparison Chart

                           ,
SIMPLE IRA Plan

Sponsor/Eligible Employer,  n  employer with 100 or fewer employees that does not currently maintain another plan,

Key Advantage,              n  salary reduction plan with little administrative paperwork,

Employer’s Role,            n  set up plan — employer may use Form 5304-SIMPLE or Form 5305-SIMPLE,
                            n  transmit contributions for employees to SIMPLE IRA,
                            n  no annual filing requirement,
                            n  bank or financial institution handles most of the paperwork,

Contributors to the Plan,   n  employee can decide how much to contribute,
                            n  employer must make matching contributions or contribute 2% of each eligible 
                               employee’s compensation,

Maximum Annual              n  employee:
Contribution*               - $12,500 in 2015 ,
(per participant) ,
                            n  employer:
                            - either match employee contributions 100% of first 3% of compensation (can be 
                               reduced to as low as 1% in any 2 of 5 years), or,
                            - contribute 2% of each eligible employee’s compensation        ,

Catch-Up Contributions*,    n  age 50 or over— additional employee contribution - $3,000 in 2015,

Minimum Employee            n  must be offered to all employees who have compensation of at least $5,000 in any 
Coverage Requirement,          prior 2 years and are reasonably expected to earn at least $5,000 in the current year,

Withdrawals, Loans,         n  withdrawals permitted any time subject to federal income taxes,
and Distributions  ,        n  subject to 10% additional tax if before age 59½ (25% if less than 2 years  
                               of participation),
                            n  must start receiving distributions by April 1 of the year following attainment  
                               of age 70½,
                            n  loans are not permitted from SIMPLE IRA plans   ,

Rollovers/Transfers,        n  rollovers permitted from one SIMPLE IRA to another SIMPLE IRA any time,
                            n  however, a rollover from a SIMPLE IRA to a non-SIMPLE IRA or to an eligible  
                               retirement plan can be made tax-free only after a 2-year participation in the  
                               SIMPLE IRA plan   ,

Vesting,                    n  employer and employee contributions are immediately 100% vested     ,

Employee Plans              n  yes,
Compliance Resolution 
System (EPCRS),

                            * See www.irs.gov/retirement for annual updates,

                             BACK  to Plan Feature Comparison Chart

         ,
401(k)

Sponsor/Eligible Employer, n  any non-government employer,
                           n  governments, only if plan was established prior to May 1986  ,

Key Advantage,             n  permits high level of salary deferrals by employees,
                           n  may include designated Roth program  ,

Employer’s Role,           n  arrange for employees to make elective deferral contributions and  
                              transmit contributions  ,
                           n  annual filing of Form 5500 is required (unless government entity),
                           n  may require annual nondiscrimination testing to ensure that plan does not  
                              discriminate in favor of highly compensated employees,
                           n  no model form to establish this plan,

Contributors to the Plan,  n  employee elective deferral contributions,
                           n  employer contributions are permissible but not required     ,

Maximum Annual             n  employee elective deferrals:
Contribution*              - $18,000 in 2015 ,
(per participant) ,
                           n  employer & employee: 
                           - lesser of $53,000 (2015) or 100% of compensation, subject to nondiscrimination testing    ,

Catch-Up Contributions*,   n  age 50 or over—additional elective deferrals - $6,000 in 2015,

Minimum Employee           n  must pass minimum coverage test,
Coverage Requirement,

Withdrawals, Loans,        n  withdrawals permitted after a distributable event occurs (e.g., retirement, death,  
and Distributions,            disability, severance from employment),
                           n  must start receiving distributions by April 1 following the later of year of retirement  
                              or attainment of age 70½   ,
                           n  plan may permit loans and hardship withdrawals,
                           n  early withdrawals subject to 10% additional tax,

Rollovers/Transfers,       n   rollovers permitted to an eligible retirement plan or IRA  ,

Vesting,                   n  employee elective deferral contributions are immediately 100% vested,
                           n  employer contributions may vest over time according to plan terms  ,

Employee Plans             n  yes,
Compliance Resolution 
System (EPCRS),

                           * See www.irs.gov/retirement for annual updates,

                             BACK   to Plan Feature Comparison Chart

         ,
403(b)

Sponsor/Eligible Employer, n  public education employers,
                           n  501(c)(3) organizations,

Key Advantage,             n  permits high level of salary deferrals by employees,
                           n  may include designated Roth program  ,

Employer’s Role,           n  arrange for employees to make elective deferral contributions and transmit contributions,
                           n  may require Form 5500 filing if employer contributions are made (unless government entity) ,
                           n  no model form to establish this plan,

Contributors to the Plan,  n  employee elective deferral contributions,
                           n  employer contributions are permissible but not required    ,

Maximum Annual             n  employee elective deferrals - $18,000 in 2015,
Contribution*              n  employer & employee - lesser of $53,000 (2015) or 100% of includible compensation,
(per participant) ,
                           n  age 50 or over— additional elective deferrals - $6,000 (2015)  ,

Catch-Up Contributions*,   Special 403(b) catch-up:
                           n  selected employers,
                           n  employee must have 15 years of service,
                           n  limited to least of: 1) $3,000; 2) $15,000 less previously excluded special catch-ups;  
                              and 3) $5,000 multiplied by years of service minus previously excluded deferrals,

Minimum Employee           n  employee elective deferral contributions:
Coverage Requirement,
                           - all eligible employees may elect to have a contribution of more than $200 by salary reduction,
                           n  other contributions:
                           - must pass minimum coverage test (except government entities),

Withdrawals, Loans,        n  withdrawals permitted after a distributable event occurs (e.g., retirement, death,  
and Distributions,            disability, severance from employment),
                           n  must start receiving distributions by April 1 following the later of year of retirement or 
                              attainment of age 70½,
                           n  plan may permit loans and hardship withdrawals,
                           n  early withdrawals subject to 10% additional tax,

Rollovers/Transfers,       n  rollovers permitted to an eligible retirement plan,
                           n  transfers permitted from one 403(b) to another 403(b),
                           n  purchase permissive service (government plans)     ,

Vesting,                   n  employee elective deferral contributions are immediately 100% vested,
                           n  employer contributions may vest over time according to plan terms ,

Employee Plans Compliance  n  yes,
Resolution System (EPCRS),

                           * See www.irs.gov/retirement for annual updates,

                              BACK   to Plan Feature Comparison Chart

                                 ,
457(b) Governmental

Sponsor/Eligible Employer, n  state and local governments,

Key Advantage,             n  permits high level of salary deferrals by employees,
                           n  may include designated Roth program  ,

Employer’s Role,           n  arrange for employees to make salary reduction contributions,
                           n  no model form to establish this plan,

Contributors to the Plan,  n  employee salary reduction contributions,
                           n  employer contributions are permissible but not required ,

Maximum Annual             n  employer & employee:
Contribution*  
(per participant) ,         - $18,000 in 2015 ,
                            - age 50 or over— additional salary reduction contribution - $6,000 (2015),

Catch-Up Contributions*,   Special 457 catch-up:
                           n  3 years prior to the year of normal retirement age  ,
                           n  limited to lesser of:
                             1) $36,000 (twice the basic annual limit) in 2015, or,
                             2) the basic annual limit plus underutilized basic annual limit in prior years
                              (only allowed if not using the age 50 or over catch-up),

Minimum Employee           n  common-law employees,
Coverage Requirement,
                           n  independent contractors,
                           n  does not need to pass a minimum coverage test,

Withdrawals, Loans,        n  withdrawals permitted after severance from employment,
and Distributions,
                           n  must start receiving distributions by April 1 following the later of year of retirement  
                              or attainment of age 70½,
                           n  plan may permit loans and distribution for unforeseen emergency or small inactive  
                              accounts,

Rollovers/Transfers,       n  rollovers permitted to an eligible retirement plan ,
                           n  transfers permitted from one government 457(b) to another government 457(b)  ,
                           n  purchase permissive service,

Vesting,                   n  employee salary reduction contributions are immediately 100% vested,
                           n  employer contributions may vest over time according to plan terms,

Employee Plans             n  no,
Compliance Resolution      n  special 180-day rule to correct  ,
System (EPCRS),
                           n  submission accepted on a provisional basis outside EPCRS,

                           * See www.irs.gov/retirement for annual updates,

                            BACK  to Plan Feature Comparison Chart

457(b) Tax-Exempt Organization                          (Non-Church),

Sponsor/Eligible Employer, n  any tax-exempt organization,

Key Advantage,             n  permits high level of salary deferrals by employees,

Employer’s Role,           n  arrange for employees to make salary reduction contributions,
                           n  no model form to establish this plan,

Contributors to the Plan,  n  employee salary reduction contributions,
                           n  employer contributions are permissible but not required,

Maximum Annual             n  employer & employee:
Contribution*               - $18,000 in 2015,
(per participant) ,
                            - no age 50 or over additional salary reduction contribution,

Catch-Up Contributions*,   Special 457 catch-up:
                           n  3 years prior to the year of normal retirement age,
                           n  limited to lesser of:
                           1) $36,000 (twice the basic annual limit) in 2015, or,
                           2) the basic annual limit plus underutilized basic annual limit in prior years,

Minimum Employee           n  selected group of management or highly compensated employees,
Coverage Requirement,      n  independent contractors,
                           n  does not need to pass a minimum coverage test  ,

Withdrawals, Loans,        n  withdrawals permitted after severance from employment,
and Distributions,         n  must start receiving distributions by April 1 following the later of year of retirement  
                              or attainment of age 70½,
                           n  plan may not permit loans ,
                           n  special rules apply to independent contractors,

Rollovers/Transfers,       n  no rollovers permitted,
                           n  post-severance transfers permitted from one tax-exempt 457(b) to another  
                              tax-exempt 457(b),

Vesting,                   n  employee and employer contributions must be subject to claims of creditors,

Employee Plans             n  no,
Compliance Resolution 
System (EPCRS),

                           * See www.irs.gov/retirement for annual updates,

                            BACK to Plan Feature Comparison Chart

                          ,
Defined Benefit

Sponsor/Eligible Employer, n  any employer,

Key Advantage,             n  provides a fixed, pre-established benefit for employees,

Employer’s Role,           n  annual filing of Form 5500 required (unless government entity),
                           n  an actuary must determine annual contributions,
                           n  no model form to establish this plan,

Contributors to the Plan,  n  primarily funded by employer,

Maximum Annual             n  actuarially determined contribution,
Contribution*              n  plan benefits are subject to nondiscrimination testing ,
(per participant) ,
                           n  maximum annual benefit which may be funded is the lesser of $210,000  
                              or 100% of a participant’s average compensation for his or her highest  
                              3 consecutive calendar years,

Catch-Up Contributions,    N/A,

Minimum Employee           n  must pass minimum coverage test,
Coverage Requirement,

Withdrawals, Loans,        n  payment of benefits after a distributable event occurs (e.g., retirement, death,  
and Distributions,            disability, severance from employment),
                           n  must start receiving distributions by April 1 following the later  
                              of year of retirement or attainment of age 70½,
                           n  loans permitted,
                           n  early withdrawals subject to 10% additional tax,

Rollovers/Transfers,       n  generally, participant’s benefit can be rolled over to another qualified plan that 
                              accepts rollovers or an IRA,

Vesting,                   n  may vest over time according to plan terms,

Employee Plans             n  yes,
Compliance Resolution 
System (EPCRS),

                           * See www.irs.gov/retirement for annual updates,

                            BACK  to Plan Feature Comparison Chart

Retirement Plan 

                                                                                      ,,
Information Resources

Download the following publications at  www.irs.gov, or order a free copy through the IRS  
by dialing (800) 829-3676.

n  Publication 560, Retirement Plans for Small Business (SEP, SIMPLE, and Qualified Plans) , ,
n  Publication 571, Tax-Sheltered Annuity Plans (403(b) Plans) For Employees of Public Schools  
   and Certain Tax-Exempt Organizations, ,
n  Publication 575, Pension and Annuity Income, ,
n  Publication 590, Individual Retirement Arrangements (IRAs) ,

The following publications are only available online at www.irs.gov/formspubs: 
n  Publication 963, Federal-State Reference Guide, ,
n  Publication 4222, 401(k) Plans for Small Businesses, ,
n  Publication 4224, Retirement Plan Correction Programs ,
n  Publication 4333, SEP Retirement Plans for Small Businesses ,
n  Publication 4334, SIMPLE IRA Plans for Small Businesses, ,
n  Publication 4587, Payroll Deduction IRAs for Small Businesses ,
n  Publication 4674, Automatic Enrollment 401(k) Plans for Small Businesses ,
n  Publication 4806, Profit Sharing Plans for Small Businesses ,

For assistance or information on retirement plans, see:
n  Plan Sponsor at www.irs.gov/retirement ,
 
Tax Exempt and Government Entities  ,
Customer Account Services  ,
(877) 829-5500 ,

Publication 4484 (Rev. 2-2015)   Catalog Number 47282U   Department of the Treasury   Internal Revenue Service   www.irs.gov