If your company has a retirement plan, have you thought recently about:
- whether the plan is as effective as it could be for you and your employees?
- how your plan could be re-structured to better meet your goals?
- supplementing your plan with a cash balance plan or cross-tested profit-sharing plan?
And if your company doesn’t have a retirement plan . . . why not? The advantages for you and your staff are numerous.
The consultants of Shore Tompkins have the experience and knowledge to advise you on these and other related questions. Helping you decide on the right type of plan and how to structure it involves looking at many factors — some of them specific to your company, others external to it.
Based on careful analysis, we’ll recommend the best options for your company. These options can include one or more of the major retirement-plan types:
|Defined Contribution Plans||Defined Benefit Plans|
|401k Plan||Cash Balance Plan|
|403b Plan||Traditional Defined Benefit Plan|
|Profit Sharing Plan|
Overview: Defined Benefit versus Defined Contribution Plans
Defined Benefit (DB) plans provide employees a guaranteed benefit. Each employee’s benefit is calculated based on individual factors such as salary history, years of service, etc. Upon termination or retirement from the company, the employee opts to receive his or her benefit as either a monthly annuity or a lump sum.
In contrast, a Defined Contribution (DC) plan does not promise a specific benefit to the employee upon retirement. Instead, the employee and/or employer contributes to the employee’s individual account under the plan. Funds in the account typically are invested by the employee from a selection of options offered by the employer. The employee receives the contributions, net of any investment gains or losses, upon termination or retirement.
Both plans provide the same “portability” options: Even after employees take distributions (withdraw funds) from either type of plan, the funds can continue to grow tax-deferred in an IRA or other qualified retirement plan.