Recommendations

 

In the final analysis, the plan or plans recommended to a client would depend upon the 

objectives of that client and their business. What are the objectives for a retirement plan for your business?

Allow employees to save for retirement

 

If this is your objective, then a 401(k) plan may be right for you. However, certain employee data must be analyzed to ensure that government regulations can be met. A member of our staff will need comprehensive employee census data, as well as possible contribution levels for all interested eligible employees, in order to project compliance.

 

Contribute on the behalf of employees and allow employees to save for retirement

 

If this is your objective, then a 401(k) plan may still be right for you. What kind of contribution would you like to make?

 

·Employer Matching ContributionThis type of contribution must comply with additional government regulations. Fortunately, the data necessary for testing the 401(k) portion of the plan would also be used for the matching portion. No further data would be required from you. The level, frequency, and type of the contribution would be discussed with a member of our staff once the necessary projections have been calculated.

 

·Profit Sharing ContributionThis type of contribution is only limited by the total amount eligible employees may save or have saved on their behalf during a plan year. Again, any compliance tests necessary could be conducted with the census data supplied for the 401(k) portion of the plan. The level of this contribution would be discussed with a member of our staff once the necessary projections have been calculated.

Contribute a variable amount on the behalf of employees

 

If this is your objective, then a Profit Sharing plan may be right for you. For this type of plan, certain calculations would be necessary in order to project the optimum contribution level for each plan year. In order to complete these calculations, a member of our staff would require comprehensive census data for your employees. The level of this contribution would be discussed once the necessary projections have been calculated. What employees would you like to have benefit the most from this kind of contribution?

 

·All employees equally - then a "pro-rata" allocation might be suggested

·Higher paid employees - then a "permitted disparity" allocation might be suggested

·Employees closer to retirement age - then an "age weighted" allocation might be suggested

·Key employees - then a "new comparability" allocation might be suggested