Frequently Asked Questions

What is the difference between a PEP and a stand-alone 401k? 

PEPs or “Pooled Employer Plans” group various employers together into one large retirement plan. Stand-alone 401ks treat each business as an individual, but PEP’s employers make up one large group, which means less upfront investment and less risk throughout the life of the plan. The other great thing about peppermint is that we are the Pooled Plan Provider (PPP), meaning we take care of all the administration, so our businesses don’t have to take on additional paperwork or tasks.  All of which makes it easier for SMBs and Startups to offer great employee retirement options. 

TLDR: PEP means faster enrollment, less investment, risk, and administration! 

What investment services do you provide? 

• • • • We provide a platform that gives automated investment advice that recommends a portfolio based on each individual’s responses to questions to determine their financial goals. Employees who want more flexibility can choose and manage their own funds.
      • Peppermint also provides a financial wellness program that
        will provide engaging educational information to participants.
      • Need help with investment options? Employers have valuable access to an investment advisor.
      • Peppermint participants have access to Vanguard’s major asset class and risk category funds.

Can I receive tax credits by offering peppermint to my employees?

Yes!  The Retirement Plans Start Up Costs Tax Credit allows eligible employers to claim half of the necessary startup and administrative costs for new plans, maxing out at $5,000 per year for up to three years. In addition, expenses to educate employees about the plan are also allowable deductions.

To use our tax credit calculator CLICK HERE

How much does it cost?

• Employer costs and fees: $750 set up fee (one time) + $1008 annual fee or $84 per month
• Participant fees: $8 per participant each month +.25% on contributions 
• Employer directed plans will require calculations and testing at an additional fee of $1000 annually
• To download or view our full pricing and fees list CLICK HERE

What funds are used for investments?

Peppermint leverages industry-leading, low-cost mutual funds from institutions such as Vanguard and Schwab, which have consistently delivered appropriate returns for investors over long-term horizons. To view our current funds list CLICK HERE

What is a Safe Harbor PEP?

In a Safe Harbor 401(k) plan, the employer avoids calculations and compliance tests by matching their staff’s investments and refraining from using a vesting schedule. The employer makes annual contributions for employees, and those contributions are vested immediately. This means if the employee separates from the employer, they can take all their investments with them. 

Who handles the administration compliance?

Peppermint handles all the administration, including compliance, for you.
To download or view our Roles and Responsibilities flyer CLICK HERE

Who handles the filings?

We handle the admin, including filing IRS 5500 and 8555-SSA forms. Peppermint will prepare, sign, and file your IRS forms so you don’t have to deal with the paperwork or liability associated with missed requirements.
To download our view Roles and Responsibilities flyer CLICK HERE

*There are no audit fees. peppermint takes the burden of the fees associated with audits.
 

Why should I offer a match?

1. Tax deductions are given to employers for making contributions
   to their employees’ retirement accounts.  
2. The employer match is a powerful recruiting tool to attract top talent.  
3. Matching employer contributions, especially safe harbor matches, ensures employers are complying with IRS and less likely to fail nondiscrimination testing. 
4. It allows higher contributions to owners and highly compensated employees without the risk of testing failure.

How does peppermint compare to other retirement savings plans?

Peppermint is one of many retirement savings options, but we do a things better. Like making the process of creating and launching a PEP simple, understandable, and fun. We don’t offer hundreds of options, and we are not a big bank with dozens of pages of fine print. We are business owners and entrepreneurs just like you, and we do one thing and do it well!
To see how peppermint compares to a 401k CLICK HERE
 

How do I know our assets are safe?

Let us introduce you to our partner, Mid Atlantic Trust Company. They serve as the custodian that holds all the 401k contributions invested into the market. Mid Atlantic handles millions upon millions of dollars in transactions a day. Your funds are secure because of them. 

Also, 401k accounts are some of the most secure accounts you can have. There are not frequent withdrawals from your account as would take place in a bank account because the funds are for retirement.  

What are the advantages of a peppermint plan?

Less fiduciary risk: Leave the fiduciary responsibilities to us! This way participating employers are not subject to the same level of liability. Peppermint maintains the highest professional standards in administering the plan. 

Potential savings: Pooling investments from several organizations into one large group means each employer has a smaller initial cost to launch their retirement plan. The pool also helps to reduce administrative costs over the life of the plan. 

Participating in a PEP may give you up to $15,000 in tax credits over 3 years. Consult your tax advisor to determine credits. 

Less manpower for plan administration: As the Pooled Plan Provider (PPP), peppermint oversees plan launch, operations, notifications, filings, enrollment, and other duties. Peppermint is perfect for employers that need a plan that has its own administration. 

Attract and retain top talent: 401k options are a major reason why employees decide to work for a new company or continue to serve their current one. It shows that you care about your staff, and it gives them peace of mind knowing they are on the road to retirement. 

What is peppermints fee schedule?

Peppermints fee structure is as follows: A one-time $750 initial setup fee along with a $1,008 annual plan provider admin fee which is paid for by the employer. Then there is a $96 annual/per participant for record-keeping/TPA, a 0.25% investment management/asset administration fee, and a $1-5 annual charge for employee notifications and disclosures delivery, all of which are deducted from the participant’s accounts. To see the breakdown of the distribution and loan fees along with other fees visit the pricing page.

How does selecting investments work?

Peppermint utilizes an online platform in conjunction with TRPC and Grey Fox Wealth, a (Registered Investment Advisory) RIA, to help with the investment selections in the 401(k) plan. This makes the process easy and helpful for those employees participating as they would only need to answer minimal questions to help set up their investment allocations. This is done through a risk profiling tool to make sure that investments in your portfolio meet your tolerance level for risk. Keep in mind, you don’t have to accept what the tool provides you, but it is certainly helpful to understand what type of investments match up with your age, time of retirement, and tolerance level for risk. To learn more about Grey Fox Wealth CLICK HERE.

How do I get started?

Just CLICK HERE and we’ll get started.

What is a vesting schedule?

The vesting schedule determines how many years the employee must work for the company (“years of service”) to own a percentage of the employer’s contribution. Peppermint plans have immediate and graded vesting options.

What are non-elective employer contributions?

Non-elective contributions are funds employers choose to direct toward their eligible workers’ employer-sponsored retirement plans regardless of if employees make their own contributions.

What is automatic enrollment and why is it beneficial to include in our plan?

As defined by the Internal Revenue Service, automatic enrollment or automatic contribution arrangement are “a feature in a retirement plan that allows an employer to ‘enroll’ an eligible employee in the employer’s plan unless the employee affirmatively elects otherwise.”

Utilizing an auto-enrollment feature allows the employer to claim an additional tax credit of $500 per year for a 3-year taxable period with the first taxable year the employer includes the auto-enrollment feature.

What is nondiscrimination testing?

NDTs are mandatory yearly tests that make sure non-Safe Harbor 401(k) retirement plans help the entire staff, not just the highest paid employees and owners. Not meeting these requirements leads to penalties, fines, and lots of administrative work.

Is my company eligible?

Yes! Under the SECURE Act, all employers are eligible to enroll in retirement
plans as long as they have employees.

What is the SECURE Act?

Setting Every Community Up for Retirement Enhancement (SECURE) Act, a bill to enable employers to provide their staff with a road to retirement. Under the SECURE Act, multiple employers can pool funding under one plan so that they can afford to give their employees 401k benefits.

What is the SECURE Act 2.0?

The SECURE 2.0 Act of 2022 enhances retirement savings options like 401(k)s and 403(b)s, building on the SECURE Act of 2019. It aims to make it easier and more affordable for small businesses to offer retirement plans, offering tax credits to offset costs. New provisions focus on increasing retirement readiness, benefiting both employers and employees and potentially improving retirement outcomes.

PARTICIPANT QUESTIONS

Can I withdraw money from my account while I am still working?

Yes, if your plan allows it, you can borrow money from your future self, but you must pay yourself back with interest and applicable fees. Otherwise, it is treated as an early withdrawal and the outstanding loan balance will be subject to current income taxes as well as a 10% penalty.