If you have both an ESOP and 401(k) plan, you may have questions about the option to combine them to reduce administrative expenses. In our video, we discuss some options.
Transcript
Combining your ESOP and your 401(k) plan may or may not reduce your administrative expenses. Certainly, if your plan is an audited plan meaning it has more than 100 participants at the beginning of the plan year, then combining the two plans into a single plan will reduce expenses by only requiring one audit of the financial statements of the trust. On the other hand, the administration of a K plan and an ESOP are very different and finding an administration platform and a service provider that can administer both plans as an integrated plan is somewhat challenging. There aren’t very many administrative platforms out that can accommodate a combined plan and due to the differences in the distribution provisions, the allocation provisions and the multi-levels of investment accounts in the plan the administration itself may be just as complex and no less costly.
