The Pacific Life Individual(k) Program covers only the self-employed owners of a business and, if
applicable, their spouses. Any type of business is eligible, including:
| | Sole proprietorships | | Partnerships | | Corporations (including both subchapter S and C corporations) |
While a one-person business clearly qualifies, there are other business arrangements that are eligible,
including family businesses (owner and spouse) and businesses with “excludable” employees, such as employees under age 21 or those who work less than 1,000 hours each year. An Individual(k) plan is generally not suitable for most businesses with non-related owners or businesses that may experience rapid growth in the future.
Individual(k) plans capitalize on tax law changes in the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), allowing owner-only businesses to enjoy the same benefits of larger company 401(k) plans. There are no complex administration requirements or discrimination testing, making them easy to set up and manage at a much lower cost. |
