The Perfect Plan - 2010 Plan year       

APC considers “The Perfect Plan” to be a 401(k) Safe Harbor Plan with a new comparability profit sharing allocation formula. A 5% of compensation contribution allows the “Highly Compensated” employees to maximize their 401(k) voluntary cash deferral ($16,500 for 2009 plus an extra $5,500 if you are age 50 or older) without regard to “Non-Highly Compensated” employees' deferral percentage. The new comparability allocation method uses the 5% of compensation safe harbor contribution in a way that provides the owner's group, in most cases, the ability to receive a maximum contribution of 100% of compensation or $49,000.

In summary, “The Perfect Plan” provides a 5% contribution for non-owner participants, has the employee benefit of a 401(k) plan, and allows owners to contribute the lesser of 100% of compensation or $49,000.

Key points:

	Greater contribution benefits to specific groups of employees.
	No stringent discrimination testing associated with traditional 401(k) plans.
	Popular plan with employees; they have more control over their retirement plan and flexibility regarding their participation.
	A 5% employee contribution can be used to satisfy both the 401(k) and profit sharing discrimination tests.