Harris - Profit Sharing Plan

Small Business Banking

Profit Sharing Plan

Who is eligible to participate?
(Employer)	Any type of public or private company or not-for-profit organization. Appealing to small, growing companies and organizations.
(Employee)	The plan may require that employees be at least 21 years old and/or have performed 1 year of service (can be extended to 2 years if contributions are immediately vested).

Who contributes? How much?	Employers may make discretionary contributions. Maximum amount of tax-deductible contributions is 25% of eligible compensation of all participants. Special contribution limit for sole proprietors and partnerships. Employee contributions are generally not applicable.

When are contributions vested?	Employer contributions are subject to a vesting schedule provided in the plan document.

How can funds be accessed?	The plan may permit employees to take loans and/or withdrawals according to plan provisions. Withdrawals made prior to age 59 ½ may incur automatic tax withholding of 20% plus a 10% early withdrawal penalty, unless a permitted exception applies.* Tax-free rollovers are permitted to an IRA or qualified retirement plan.

What special administrative requirements are associated with the plan?	Simplified nondiscrimination testing and "top-heavy" testing is required, along with Form 5500 and ERISA disclosure.

When you are ready to establish your plan or if you still have questions, contact our Business Banking Service Center at 1-888-489-2265.

* Permitted exceptions include disability, death, and others. Please consult your tax advisor.

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