All
retirement plan services provided
by Clemons & Campbell, Inc.
Why Sponsor a Retirement
Plan?
Employer sponsored retirement plans
offer significant opportunities to
provide for retirement in a tax advantaged
way. An employer's contributions to
these plans are tax deductible. An
employee's salary deferral contributions
are excluded from current taxable
income. Plan benefits are not taxed
until actually distributed. Investment
earnings accumulate on a tax-deferred
basis. Employer sponsored retirement
plans are a valuable and essential
benefit in helping to attract and
retain quality employees.
TYPES
OF PLANS |
401(k)
Plan
A 401(k) plan allows employees
to save for the future by deferring
salary today on a pre-tax basis.
Employers can choose to contribute
to their employees' 401(k) plans
through matching contributions.
Profit Sharing
A Profit Sharing plan allows
an employer to make contributions
to employees' retirement accounts.
Contributions are discretionary
on an annual basis and are normally
based on the company's profitability.
Cross-Tested
Profit Sharing
A cross-tested profit
sharing plan uses an allocation
method that converts contributions
into a projected benefit at
retirement. These generally
allow for much higher contributions
for the Highly Compensated group
of employees. The cross tested
plan must pass nondiscrimination
testing in order to remain qualified.
Defined Benefit
A Defined Benefit plan allows
an employer to commit to making
contributions to a tax-exempt
common trust to provide a pre-determined
monthly benefit at normal retirement.
The contributions, determined
annually by an Actuary, usually
relate to an employee's service
and/or pay. |
What Type of Plan is Right?
In determining the right type of plan,
the following should be considered:
age, length of service and income
levels of employees, amount the employer
is willing to contribute to the plan,
whether flexibility is necessary,
the cost of maintaining the plan.
Steps for Establishment of
a Retirement Plan:
- Consider what type of plan is
appropriate.
- Determine what plan features will
apply.
- Determine who will invest the
assets and who will be responsible
for the administrative functions.
If you have ANY questions, or are
unclear about certain aspects of Retirement
Planning, feel free to fill
out our easy to use contact form,
and we would be glad to assist you.
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