Welcome to Executive Benefit Plans, Inc.

 
Main Link Column
Select this link Retirement Plans
Select this link Strategies
Select this link Employee Benefits
Select this link Individual Benefits
Select this link Participant Info
Select this link White Papers
Select this link Consulting Service
Select this link Proposal Request
Select this link Administration
Select this link Contact
Select this link News
Select this link Blog
Select this link Home
 

Plan Insight

NOVEMBER 2010 Newsletter

What’s the Difference?

401(k) and Profit-Sharing Plans

• Participant's retirement benefits based on participant’s account balance

• May allow employees to contribute through salary deferrals

• Depending on the type of plan, employer may be required to make annual minimum contributions

• Contribution limits of up to $49,001 or more if catch-up contributions

• Must meet minimum coverage tests but can exclude some employees

• More complex to set up and operate

• Annual return usually required

• May require annual nondiscrimination testing

• Greater design flexibility

• Loans and hardship withdrawals allowed

• May delay vesting of some employer contributions

Defined Benefit Plan

• Participant's annual retirement benefit determined by the plan's benefit formula

• Higher annual retirement benefits possible, up to $195,001 per year

• Actuary required to determine employer's annual contributions

• Must meet minimum coverage tests but can exclude some employees

• Most complex to set up and operate

• Annual return required

• Annual nondiscrimination testing required

• Greater design flexibility

• Plan may allow loans

• May delay vesting of participants' accrued benefit

The tax code does not place limits on the number of plans a company may sponsor. For many small businesses it may make sense to sponsor both types of plans in order to maximize retirement savings.

Defined Benefit Pension plans have traditionally formed the backbone of our retirement plan system. They offer guaranteed retirement benefits with limited risk to employees, making them an ideal way to help your employees build a secure future. In recent years, defined benefit plans have proved a useful small business tool in helping high net worth individuals achieve their strategic retirement goals as well.

Executive Benefit Plans, Inc. offers a full array of fund options for Defined Contribution and Defined Benefit plans through our contractual relationships with leading financial institutions. Spanning the risk/return spectrum, your retirement program is designed to appeal to the needs of every type of plan participant, providing choices in every major asset category.

'NEWS' link

 

Retirement Plans

Select this link Consulting Services

Select this link Qualified Plans

   Select this link Savings Calculator

   Select this link   401k

   Select this link Safe Harbor 401k

   Select this link Roth 401k

   Select this link SIMPLE 401k

   Select this link Profit Sharing

   Select this link Money Purchase

   Select this link Defined Benefit

   Select this link Cash Balance

   Select this link Prohibitive Transactions

   Select this link Contribution Limits

Select this link Other Plans

   Select this link IRAs

   Select this link 419(e)

   Select this link SEPs

   Select this link SARSEPs

   Select this link SIMPLE IRA

Other Links

Select this link Tests

    Select this link ACP Test

    Select this link ADP Test

Select this link Restatements

Select this link Amendments

Select this link Mistakes

Select this link Catch-up

Select this link Funding Limits

Select this link EGTRRA Q&A

Select this link Conduit IRA

Select this link Pricing

Select this link Quote

Select this link White Papers

Select this link FAQs

Select this link Glossary

 

 

Information is provided for review and consideration only. Please consult legal and tax advisors for practical advice pertaining to your business and personal situations.

Material in our newsletter may have been extracted in whole or in part from the IRS Employee Plans publication, and the presence of IRS material does not constitute or imply the endorsement, recommendation, or favoring by the IRS of any opinions, products, or services offered by the sponsor of this web page or document.

This page was last reviewed and/or updated on Thursday, March 29, 2012 11:34 AM

 
Privacy Statement - Executive Benefit Plans, Inc. Copyright 1996 - 2011 All Rights Reserved - Legal Statement
Website Powered by UHSystems