EDU Articles

Learn about investing, trading, retirement, banking, personal finance and more.

Ad is loading...
Help CenterFind Your WayBuy/Sell Daily ProductsIntraday ProductsFAQ
Expert's OpinionsWeekly ReportsBest StocksInvestingTradingCryptoArtificial Intelligence
IntroductionMarket AbbreviationsStock Market StatisticsThinking about Your Financial FutureSearch for AdvisorsFinancial CalculatorsFinancial MediaFederal Agencies and Programs
Investment PortfoliosModern Portfolio TheoriesInvestment StrategyPractical Portfolio Management InfoDiversificationRatingsActivities AbroadTrading Markets
Investment Terminology and InstrumentsBasicsInvestment TerminologyTrading 1 on 1BondsMutual FundsExchange Traded Funds (ETF)StocksAnnuities
Technical Analysis and TradingAnalysis BasicsTechnical IndicatorsTrading ModelsPatternsTrading OptionsTrading ForexTrading CommoditiesSpeculative Investments
Cryptocurrencies and BlockchainBlockchainBitcoinEthereumLitecoinRippleTaxes and Regulation
RetirementSocial Security BenefitsLong-Term Care InsuranceGeneral Retirement InfoHealth InsuranceMedicare and MedicaidLife InsuranceWills and Trusts
Retirement Accounts401(k) and 403(b) PlansIndividual Retirement Accounts (IRA)SEP and SIMPLE IRAsKeogh PlansMoney Purchase/Profit Sharing PlansSelf-Employed 401(k)s and 457sPension Plan RulesCash-Balance PlansThrift Savings Plans and 529 Plans and ESA
Personal FinancePersonal BankingPersonal DebtHome RelatedTax FormsSmall BusinessIncomeInvestmentsIRS Rules and PublicationsPersonal LifeMortgage
Corporate BasicsBasicsCorporate StructureCorporate FundamentalsCorporate DebtRisksEconomicsCorporate AccountingDividendsEarnings

Who Establishes a 401(k)?

Employers play a crucial role in establishing and overseeing 401(k) plans, making it an attractive retirement savings option for many employees. A 401(k) is a tax-advantaged retirement account that allows individuals to save and invest a portion of their pre-tax income. In this article, we will explore the responsibilities of employers in establishing a 401(k) plan and examine the various options available to both employers and self-employed individuals.

The decision to establish a 401(k) plan rests with the employer. By offering this retirement savings vehicle, employers can attract and retain talented employees who value long-term financial security. However, it is essential for the plan to be appealing enough to encourage employee participation. As the sponsor and fiduciary, the employer assumes the responsibility of overseeing the 401(k) plan.

Employers also have the option to establish an Individual 401(k) plan if they are self-employed. This type of plan operates similarly to a regular 401(k) but without the testing and auditing requirements. The contribution limits for Individual 401(k) plans are the same as for regular plans, providing self-employed individuals with a tax-efficient retirement savings tool. Additionally, employers can explore alternative work-site retirement plans such as SIMPLE IRAs, SEP IRAs, profit-sharing, and deferred compensation arrangements.

One of the key advantages of 401(k) plans is their flexibility. They offer high contribution limits, allowing individuals to save significant amounts for their retirement. Compared to other retirement plans, 401(k)s have relatively low employer contribution requirements. In fact, employers have the option to contribute nothing at all. However, to ensure the plan remains compliant, it is crucial for employers to ensure sufficient employee participation to satisfy the Average Deferral Percentage (ADP) and top-heavy testing requirements.

If only highly compensated employees (HCEs) contribute to the plan, it may fail to meet compliance standards, and contributions may need to be returned. As sponsors, employers collaborate with custodians, bookkeepers, and administrators to maintain the plan on behalf of the employees. These administrative roles are distributed to prevent conflicts of interest and ensure that the 401(k) plan operates in the best interest of the employees. This fiduciary capacity ensures that the employer acts prudently and prioritizes the long-term financial well-being of the plan participants.

It is important to note that the fiduciary capacity of employers in managing 401(k) plans should not be confused with the Fiduciary Standard applicable to advisors with a Series 65 or 66 license. The Fiduciary Standard, which gained significant attention with the introduction of new Department of Labor regulations in 2016, imposes a legal obligation on financial advisors to act in the best interests of their clients. While employers have fiduciary responsibilities toward their employees' 401(k) plans, financial advisors adhere to a different set of standards.

Tickeron's Offerings

The fundamental premise of technical analysis lies in identifying recurring price patterns and trends, which can then be used to forecast the course of upcoming market trends. Our journey commenced with the development of AI-based Engines, such as the Pattern Search EngineReal-Time Patterns, and the Trend Prediction Engine, which empower us to conduct a comprehensive analysis of market trends. We have delved into nearly all established methodologies, including price patterns, trend indicators, oscillators, and many more, by leveraging neural networks and deep historical backtests. As a consequence, we've been able to accumulate a suite of trading algorithms that collaboratively allow our AI Robots to effectively pinpoint pivotal moments of shifts in market trends.

Ad is loading...