The OppenheimerFunds Single KSM Plan is a retirement savings alternative for owner-only employers. It offers business owners more flexible plan design features and greater savings potential than other small business retirement plans such as SEPs and SIMPLE IRAs. This easy to establish plan offers the benefits similar to a Safe Harbor 401(k) typically enjoyed by larger employers and requires minimal administration at a low cost, to meet the needs of the owner-only employer.

Who Qualifies

Designed for corporations, partnerships, sole proprietorships and nonprofit entities that employ:

  • Owners and spouses, owner’s parents, children and grandchildren, and
  • Owners with excludable part-time or seasonal employees.

Plan Features

Employee coverage requirements

  • Must include employees age 21 or older with two or more years of service.
  • May exclude employees with less than 1,000 hours of service annually.
  • Employer may set less restrictive requirements.

Vesting

  • Immediate 100% vesting in contributions.

Funding the Single K Plan and contribution limits for 2016

  • The plan can be funded through participant salary deferrals and discretionary employer profit-sharing contributions.
  • Overall contribution maximums may not exceed the lesser of $53,000 or 100% of eligible compensation up to $265,000.

Employer contributions

  • The maximum tax-deductible profit-sharing contribution is the lesser of 25% of eligible compensation or 20% for self-employment income.
  • Contributions are not eligible to be deposited on Roth (after-tax) basis.

Participant salary deferrals

  • The maximum allowable deferral is the lesser of:
    • 100% of employee’s compensation or $18,000.
    • Individuals age 50 and above may contribute an additional $6,000 in catch-up contributions, for a maximum of $24,000.
    • Catch-up contributions do not apply to overall contribution limit.
    • Deferrals may be made as Traditional (pretax) and/or Roth (after-tax) 401(k) contributions.

Withdrawals

  • Loans permitted: Participants may borrow up to 50% of their retirement account balance or $50,000, whichever is less. The minimum loan amount is $1,500.
  • Hardship distributions permitted.
  • Withdrawals are permitted after a triggering event occurs: retirement, termination of service, death or disability.
  • Generally withdrawals are penalty-free after age 59 ½. Certain exceptions may apply; see IRS Publication 590-B for additional information.
  • Roth IRA earnings are tax free after the account owner has attained the age 59 ½ and has held the account for at least 5 years.

Employer’s responsibility

  • Operate plan in accordance to the terms of the plan document.
  • Fund plan timely.
  • File Form 5500 for any plan that:1
    • Includes non-owner employees as participants.
    • Includes an owner’s parents, children or grandchildren as participants.
    • Have plan assets of at least $250,000 across all qualified plans.
    • Is sponsored by an employer that is part of a controlled group.

Investments

OppenheimerFunds is a high conviction global leader in asset management with a history of providing long-term innovative investment strategies, combined with intelligent risk taking, to help meet investors’ needs.

Administrative fees

  • No plan installation fee. No additional charge for IRS approved plan documents.
  • Low annual maintenance fee per participant2:
    • $30 for balances under $50,000.3
  • $75 loan set-up fee.
  • Fund expenses apply.

Next Steps

To get started, download the Single K Account Establishment Kit and access instructional video for assistance with completing the Adoption Agreement. Material and return by the end of the plan year (December 31 for calendar year-end plans).

Call 800.255.2750 to talk to your Regional Advisor Consultant for more information.

Resources

1OppenheimerFunds does not provide Form 5500 preparation services. Please consult a qualified tax advisor for assistance.

2Other account-related fees (if applicable), and fund expenses apply.

3The fee will be waived if the total investments in Oppenheimer funds retirement and/or nonretirement accounts, excluding OppenheimerFunds direct-sold 529 plans, is $50,000 or more.