FAQs

There are no hidden fees with American Trust. We fully disclose all our fees upfront in an easy-to-read document on an ongoing basis. You will know the “true” cost of your plan in dollar terms and as a percentage of assets.

A few advantages of offering a retirement plan within your company benefits package include:

• Recruiting and retaining talented employees, reducing your turnover rates
• Allowing employees to save for retirement on a before-tax or if implemented by the employer, an after-tax basis, through Roth contributions
• Generating tax deductions for the employer
• Growing employee and employer contributions through the investments opportunities

Flexibility is the leading advantage of a traditional 401(k) Plan. We can help you determine the best way to structure your employer contributions, eligibility requirements, and vesting schedules to meet your business needs. Payroll deducted employee contributions are also available within 401(k) plans and annual testing is required to ensure this benefit is not discriminating against groups of employees.

Safe Harbor 401(k) plans are similar to a Traditional 401(k) plan; however, with a Safe Harbor 401(k), the annual nondiscrimination testing is not required. In return, the employer must provide a minimum contribution with immediate vesting to the eligible employees.

Every company may personalize their employee eligibility requirements within their plan. Generally, employees who are over age 21 and completed one year of service with over 1,000 hours of work are eligible to participant. Employees cannot be excluded because of their age or part-time status; however, if the employees have another plan available to them, they may be excluded. For example, companies with collective bargaining agreements may have employees covered under a “company plan” and a “union plan”.

We consult with you to evaluate your employer contribution. Your employee demographics and turnover rates help you determine which route is best for your business. A discretionary company match or flexible profit sharing are available if you decide to contribute to a traditional 401(k) plan. Under a Safe Harbor 401(k) plan you only have two options: 1.Profit sharing program equal to 3 percent of compensation, or 2. Match program up to at least 4 percent of compensation. The most common Safe Harbor Match calculation is dollar for dollar on the first 3 percent and fifty cents on the dollar for the next 2 percent of compensation.

A company match is only given to employees that are personally contributing to the plan and a profit sharing is given to all eligible employees. Profit sharing is also referred to as nonelective contribution.

A fund is an individual investment including mutual funds, stocks, bonds, money market funds, and other investment vehicles. The source represents where the contribution comes from and is made up of funds. Common sources you may have in your plan include: employee pre-tax deferral, employee Roth contributions, company match, and company profit sharing.

Employee contributions, Safe Harbor employer contributions, and any earnings or losses from these contributions are always fully vested. Other employer contribution sources may have a vesting schedule, designed to reward employees who stay employed over an extended period of time. If an employee leaves the company prior to being fully vested in a source, the non-vested funds are forfeited back. For example, if a company has a six year graded vesting schedule and an employee leaves after four years, they may need to surrender a portion of employer contribution.

The Employee Retirement Income Security Act of 1974 (ERISA) allows you to delegate considerable responsibility and liability by hiring an investment manager as defined by ERISA §3(38). The investment manager focuses on the selection, monitoring, and removal functions of the plan’s investment options. Within our discretionary trustee services, we act as your §3(38) fiduciary.

Primary discretionary trustee qualifiers include banks or trust companies that hold securities under their name, are certified to review and make recommendations regarding investments, and assume full responsibility and liability for the investment selection, monitoring, and removal within the plan.

There are many reasons you should hire a discretionary trustee and investment manager. It can save you time, alleviate liability, reduce risk of litigation, lowers audit expenses, share knowledge and expertise with you, and offer extra protection regarding fees and investments.

Our due diligence emphasizes six key elements we believe are essential to understanding the attractiveness and quality of each manager strategy. This same review process is used to review new managers, as well as monitor existing ones. The key elements include performance, risk, portfolio assessment, strategy, operations, and firm review.