Types of Plans

Hicks Pension Services utilizes over 50 years of experience in the retirement plan industry to design a plan to fit your company’s needs. Please see below for some of the most popular plans we administer.

401(k) Plan

The most popular plan available today is the 401(k), a defined contribution plan that allows employees to defer a portion of their salary before taxes and contribute it to a qualified Plan. Deferral amounts must be made through payroll deductions and have annual limits. Distributions are taxed as ordinary income. The plan may allow employees to make after-tax Roth contributions. Provides the option for a company to make additional profit sharing contributions.

Safe Harbor 401(k) Plan

Safe harbor contributions can be added to traditional 401(k) plans to eliminate the burden of discrimination testing. They require the employer to make a specific contribution to each participant in the plan, which can be non-elective or matching. The safe harbor feature makes it possible for highly compensated employees to defer up to the annual maximum every year. The most common safe harbor formulas are:

  • Basic match: A 100% match on an eligible employee’s deferral up to 3% of annual compensation and a 50% match on the next 2% of the employee’s deferrals.
  • Enhanced match: A matching contribution that’s at least as generous as the basic match at any level of an employee’s deferral. For example, eligible employees may receive a 100% match on deferrals up to 4% of their annual compensation.
  • 3% Non-Elective: A contribution for all eligible employees – including employees who don’t defer compensation – that equals a minimum of 3% of their annual compensation.

Cash Balance Plan

A cash balance plan is a type of defined benefit plan that has characteristics of a defined contribution plan, such as a 401(k), and offers more portability than traditional pension plans – you can take your vested account as a lump sum whenever you terminate employment. Each year, a participant’s account is credited with a pay credit (compensation based) and an interest credit. This is a powerful retention tool that is not subject to annual contribution limits.


  • Option to overfund contributions (150%) in a good year
  • Excellent source of retirement income for older business owners close to retiring
  • Can contribute well above traditional 401(k) annual limits