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FAQ
 | What is the
best retirement plan for my company?
Choosing the best plan depends on your goals. First decide
on your budget, i.e. how much can you afford to contribute
(including contributions for eligible employees)
 and then
decide the purpose of the plan. Is it meant to be a true
retirement/employee benefit plan or a vehicle for the
owners to shelter their income. If the latter is your goal
(particularly in a small company) consider an age weighted
profit sharing plan, a target benefit plan or a defined
benefit plan, otherwise consider a profit sharing plan or
a 401(k) plan. For more information see the article
Choosing the Correct Plan. |
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When must I
make the contribution to my company retirement plan?
There are two deadlines to consider. First for
purposes of deductibility the contribution must be made by
the due date, including extensions, of your company's tax
return.
 To satisfy IRS rules on funding, if your plan is a
pension plan (defined benefit, target benefit or money
purchase) the contribution must be made by 8 1/2 months
after the end of the plan year (which may be different
than your company's tax year). |
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What
is the most I can contribute to my 401(k) plan?
If you are not a more than 5% owner of the business and
your compensation is less than $80,000 you can generally
contribute the lesser of 25% of your compensation or
$10,500 (2000). If your employer makes a matching
contribution and/or a discretionary profit sharing
contribution that limit may be reduced. If you are a more
than 5% owner or your compensation is more than $85,000
the amount you can contribute depends on the contributions
made by the first group of employees above (not a more
than 5% owner and compensation less than $80,000), the
contributions made by the employees in your group (owners
and high compensation), and the general rule above. |
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Can my company
have more than one qualified retirement plan?
Yes. There is no limit on the number of plans your
company may have. The limits apply only on the total
benefits the plans provide to participants. IRS
regulations set forth those limits depending on the types
of retirement plans your company sponsors. |
| One of my
employees would rather take the cash than participate in
my profit sharing plan. Is that allowed?
Generally that can only be done in a "cash or deferred
arrangement," a type of 401(k) plan. Any other plan
offering that option could disqualify the plan. |
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believe in providing our clients with clear solutions
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and always. We believe that long-term customer
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