Letter: S

A document that summarizes the key features of a 401(k) plan in plain language. A shorter version of the plan document, it includes information such as plan eligibility, employer matching contributions, vesting, participant rights, hardship withdrawals and loans, and filing for benefits. By federal law, every participant in the plan must receive a summary plan description within 90 days of becoming a participant. Always read your summary plan description for important information on how your plan works.

A report that summarizes the financial status of a 401(k) plan. Federal law requires that companies must provide a summary annual report to plan participants every year.

An ownership share of a company. When you buy shares of stock in a company, either directly or through a mutual fund, you own a piece of the company.

Savings Incentive Match Plan for Employees. This is a simplified 401(k) plan for businesses with 100 or fewer employees. The employer is required to make minimum annual contributions for each participant, and the employer contributions are immediately 100 percent vested. SIMPLE plans reduce the administrative burdens on employers.

The portion of your salary that is deducted and placed in your 401(k) account rather than included as take-home pay. Expressed as a percentage or dollar amount.

Similar to a regular 401(k) plan, but the employer is required to make contributions for each employee–either matching contributions or a 3% contribution to all participants. The employer contributions are immediately 100% vested. The Safe Harbor 401(k) makes it easier for employers by eliminating some of the complex tax rules applied to traditional 401(k) plans.