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Defined Benefit Plans

Commonly, it may calculate a benefit through a plan formula that considers such factors as salary and service — for example, 1 percent of average salary for the last 5 years of employment for every year of service with an employer. The benefits in most traditional defined benefit plans are protected, within certain limitations, by federal insurance provided through the Pension Benefit Guaranty Corporation (PBGC).

401(k) Plans

A defined contribution plan where employees can elect to defer receiving a portion of their salary which is instead contributed on their behalf, before taxes, to the 401(k) plan. As employer you may match these contributions. There are special rules governing the operation of a 401(k) plan and you must advise employees of any limits that may apply. Employees who participate in 401(k) plans assume responsibility for their retirement income by contributing part of their salary and, commonly, by directing their own investments.

Cash Balance Plans  

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 the promised benefit in terms of a stated account balance. In a typical cash balance plan, a participant's account is credited each year with a "pay credit" (such as 5 percent of compensation from his or her employer) and an "interest credit" (either a fixed rate or a variable rate that is linked to an index such as the one-year treasury bill rate). Increases and decreases in the value of the plan's investments do not directly affect the benefit amounts promised to participants. Thus, the investment risks and rewards on plan assets are borne solely by the employer. When a participant becomes entitled to receive benefits under a cash balance plan, the benefits that are received are defined in terms of an account balance. The benefits in most cash balance plans, as in most traditional defined benefit plans, are protected, within certain limitations, by federal insurance provided through the Pension Benefit Guaranty Corporation (PBGC).

Employee Stock Ownership Plans (ESOP)

A form of defined contribution plan in which the investments are primarily in employer stock.

Best-Fit Coordination | Successful Plans
Excellent benefits help you attract, reward and retain exceptional employees. You know that you need to keep these benefits costs reasonable and under control. You also know that you don't want the complexities of monitoring this program taking up your valuable work time.  If you are looking to start a new retirement plan we
can help you find the right plan to meet your goals and objectives.
Alternatively, if you have an established plan in place we can help you ensure the plan is still meeting the stated goals and objectives.  Also, we can help you improve the current plan.

Contact us for a plan review.

ERISA 408(b)(2) Plan Sponsor Fee Disclosure

Regulation

As you are likely aware, new regulations on fee disclosure in the retirement plan industry take effect this year (2012). ERISA 408(b)(2) plan sponsor disclosure requirements and the 404(a) participant disclosure requirements will have significant impact on fiduciaries of qualified retirement plans.


The Department of Labor regulatory deadlines for disclosing fees to your plan

participants and their beneficiaries is as follows:


Initial and Annual Notice:

The effective date for calendar year plans is now no later than May 31, 2012


Quarterly Notice:

The effective date for calendar year plans is on or before August 14, 2012*.


Since deadlines are fast approaching, we welcome the opportunity to help educate and assist you to:

• Establish and maintain procedures to evaluate service agreements with your plan

service providers

• Understand and meet your fiduciary responsibilities with regard to fee disclosure

• Understand what steps to take to satisfy your 404(a) disclosure obligations to

your employees

• Develop a communication plan for your employees

• To field questions and concerns from employees.


Contact us for a consultative appointment to discuss your plan and what you need to do to comply.

Money Purchase Pension Plans

A plan that requires fixed annual contributions from the employer to the employee's individual account. Because a money purchase pension plan requires these regular contributions, the plan is subject to certain funding and other rules.

Protect Your Company, Protect Your Employees, Protect Your Family, Protect Your Future

Simplified Employee Pension Plan (SEP)

A (SEP) is a relatively uncomplicated retirement savings vehicles. A SEP allows employees to make contributions on a tax-favored basis to individual retirement accounts (IRAs) owned by the employees. SEPs are subject to minimal reporting and disclosure requirements. Under a SEP, an employee must set up an IRA to accept the employer's contributions. Employers may no longer set up Salary Reduction SEPs. However, employers are permitted to establish SIMPLE IRA plans with salary reduction contributions. If an employer had a salary reduction SEP, the employer may continue to allow salary reduction contributions to the plan.

Profit Sharing Plan or Stock Bonus Plan

A defined contribution plan under which the plan may provide, or the employer may determine, annually, how much will be contributed to the plan (out of profits or otherwise). The plan contains a formula for allocating to each participant a portion of each annual contribution. A profit sharing plan or stock bonus plan include a 401(k) plan.