Retirement Plans

The following are the general types of retirement plans that we work with.

DEFINED CONTRIBUTION PLANS– Retirement plans in which contributions are made by the employer, employee, or both. The final payout depends on how much is invested and the success of the investments.
401(k) Plan – Plan that allows workers to make voluntary, tax-deductible contributions to the plan up to certain limits; contributions may be matched by the employer. These plans are also called salary reduction plans.
ESOP – An Employee Stock Ownership Plan is a plan whose contributions consist mainly of the stock of the employer company. The value of ESOP benefits is determined by how well the stock of a company does.
Money Purchase Plan– Plan that provides for the employer to make a fixed annual contribution to the plan, for example, a percentage of a workers compensation.
Profit-Sharing Plan – Plan that bases contributions on business profits or a percentage of pay. “Discretionary profit sharing” plans generally allow employers to decide each year whether to contribute.

PENSION PLANS FOR SMALL BUSINESSES

Keogh Plan – Plan that allows self-employed persons to set aside tax deductible sums in pension accounts for themselves and their employees.
SEP– A Simplified Employee Pension is a defined contribution pension plan that does not have the same reporting and disclosure requirements as more complicated plans.
SIMPLE – Savings Incentive Match Plan for Employees of small employers with 100 or fewer employees. The employees contribute a percentage of their salary up to certain limits, and the employer either matches that or contributes 2% of the employees’ wages.
DEFINED BENEFIT PENSION PLAN– Plan that promises a certain benefit at retirement, usually calculated through a formula based on a combination of years of service and amount of pay. Money is paid into the plan for all participating employees, but some will not qualify for, and therefore will not get, benefits. The employer assumes the investment risk.