"Helping you navigate your financial course"
With so many contribution options available to your company and your retirement plan participants, it can be difficult to find the options which work best for your budget while offering fair and rewarding contributions to your employees.
As part of your initial consultation, you will work side by side with our professional advisors to weigh the pros and cons of each option to uncover the perfect fit for your specific plan.
Matching contributions are a great way for your company to provide your employees with an extra bonus while also helping persuade employees to defer, which enables more highly compensated employees to defer more due to discrimination testing.
Your company's matching contribution does not have to be large in order to beneficial. Studies have indicated that even a match of $0.25 to $0.50 for every dollar contributed by the participant is sufficient.
Some of the more common matching arrangements match contributions up to 4% to 6% that the employees defer. For example, a $0.25 contribution to each dollar up to 4% would only cost your company approximately 1% of compensation.
Explore all of your retirement plan contribution options with our knowledgeable, experienced investment advisors and consultants.
Give us a call today to schedule a consultation and learn more.
While profit sharing contributions are not required outside of top heavy plans, they provide a way to set a specific, determinable amount of compensation provided by the company based on the profits of the company. A specific percentage of each employee's compensation – or an amount to be determined annually by the company – is then shared.
Salary Ratio Contributions – Each participant receives a percent of the contribution based on the percent that their income compares to the total compensation. For example, if a participant's compensation is $50,500 and the total compensation is $1,000,000, the participant will receive 5% of the contribution ($50,000 / $1,000,000).
Social Security Integrated Contributions – Each participant receives an allocation similar to the salary ratio contribution described above. Additionally, employees whose income is above the Social Security Taxable Wage Base will receive an addition allocation based on their income above the Taxable Wage Base.
Age-weighted Contributions – Each participant receives an allocation to their account based upon not only their salary, but also their age. This helps participants who are closer to their retirement by increasing the amount of their allocations.
"Cross-tested" Contributions – Each participant is put into a rate class and receives an allocation to their accounts based upon this rate class. This rate class is then tested for discrimination, based upon an analysis of their projected benefits and their retirement. This takes into account their age, income, and years of service.