DEFINED CONTRIBUTION PLANS

1. 401(k) is a Profit-sharing plan with added “Cash or Deferred Arrangement” permitting employee deferrals.
   Who may establish the plan? Corporations, partnerships, limited liability companies, sole proprietorships, tax exempt entities (other than government or non-electing church).  
    
2. Safe Harbor 401(k) is a traditional 401(k) that may be exempt from the ADP and/or ACP test and top-heavy rules provided requirements are met.
   Who may establish the plan? Corporations, partnerships, limited liability companies, sole proprietorships, tax exempt entities (other than government or non-electing church).
    
3. Non-Integrated Profit-Sharing is a Defined contribution plan with discretionary employer contributions allocated proportionately to each employee (as a percentage of compensation). May include 401(k) feature.
   Who may establish the plan? Corporations, partnerships, limited liability companies, sole proprietorships, tax exempt entities.
    
4. Integrated Profit-Sharing is a Defined contribution plan whose employer contribution is integrated with Social Security. Larger contributions are provided for higher paid employees whose compensation is greater than an amount based on Social Security taxable wage base. May include 401(k) feature.
   Who may establish the plan? Corporations, partnerships, limited liability companies, sole proprietorships, tax exempt entities (other than government).
    
5. Cross-Tested Profit Sharing is also a Defined contribution plan that tests for discrimination of benefits rather than contributions. Benefits older/higher-paid employees. May include 401(k) feature.
   Who may establish the plan? Corporations, partnerships, limited companies, sole proprietorships, tax exempt entities.
    
6. ERISA 403(B) is a Defined contribution plan for employees of non-profit, tax-exempt organizations covered under the Employee Retirement Income Security Act of 1974 (ERISA). Pre-tax employee elective deferrals permitted.
   Who may establish the plan? Public educational institutions; private tax-exempt employers qualifying under Code Section 501(c)(3).

DEFINED BENEFIT PLANS

A Defined Benefit Plan is a pension plan providing a specified monthly benefit for eligible participants when they retire (formula uses percentage of salary).
Who may establish the plan? Corporations, limited liability companies, sole proprietorships, partnerships and nonprofits may establish the plan.

CASH BALANCE PLAN (is in Defined Benefit Plans family)

There are two general types of pension plans — defined benefit plans and defined contribution plans. In general, defined benefit plans provide a specific benefit at retirement for each eligible employee (percentage of salary based on last 3 years earnings). While defined contribution plans specify the amount of contributions to be made by the employer toward an employee's retirement account. In a defined contribution plan, the actual amount of retirement benefits provided to an employee depends on amount of the contributions as well as the gains or losses of the account.

A cash balance plan is a defined benefit plan that defines the benefit in terms that are more characteristic of a defined contribution plan. In other words, a cash balance plan defines a promised benefit in terms of a stated cash account balance amount.

IRA-BASED PLANS

1. SEP IRA Is a Simplified Employee Pension (SEP) plan with discretionary employer contributions.
   Who may establish the plan? Corporations, limited liability companies, sole proprietorships and partnerships.
    
2. SIMPLE IRA Is a Savings incentive Match Plan for Employees (SIMPLE) with employee and employer contributions.
   Who may establish the plan? Any employer with fewer than 100 employees earning at least $5,000 in preceding year.

Summary

Whether you are considering starting an Employer Sponsored Retirement Plan for your employees, or moving your current plan to a new one, we can help. Our firm specializes in ERISA Qualified Retirement Plans. We can provide comprehensive investment management for your company's plan. This includes plan design, investment screening and monitoring, benchmarking, cost efficiencies, sub account and fund manager performance evaluations, and participant education. You also have the option to enlist our fiduciary guidance services. We are an Accredited Investment Fiduciary AIF 3(21) and Accredited Investment Fiduciary Analyst AIFA 3(38).

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