Retirement Plan Design and
Non-Discrimination Testing:
I offer retirement plan design and non-discrimination testing services with a focus on new comparability plans. These are defined contribution profit sharing plans (PSPs) that satisfy non-discrimination testing on a benefits basis.
New comparability plans are especially valuable for older owners or executives of companies in which the younger population is not classified as highly compensated. The older participants are allowed to have higher allocations to their retirement accounts since the allocations will not have as long to accumulate to retirement age as for the younger participants. Below is an example of a plan that I redesigned that illustrates the value of new comparability plans. Note that all allocations to these retirement plans are tax-deductible, and so there are huge tax advantages for having these plans.
OLD PLAN
401(k) PSP |
Allocation
as a Percentage of Salary |
Dollar Amount of Allocation |
Percentage of Total Dollar Allocation |
Staff
26 Employees |
3 % (PSP)
Up to 2 % match on 401(K) |
$ 49,500 |
53.1 % |
Partners
6 Employees |
Same as staff |
$ 43,700 |
46.9 % |
Totals |
|
$ 93,200 |
100 % |
NEW PLAN
New Comparability Plan |
Allocation
as a Percentage of Salary |
Dollar Amount of Allocation |
Percentage of Total Dollar Allocation |
Staff |
5 % Safe Harbor 401(K)
No PSP Allocation |
$ 55,500 |
26.5 % |
Partners |
5 % Safe Harbor 401(K)
Enhanced PSP Allocations |
$ 154,000 |
73.5 % |
Totals |
|
$ 209,500 |
100 % |
These plans can be equally valuable for owners of small businesses. For example, I designed a new plan for an attorney that employed a single other employee in which the attorney was able to allocate 25% of her salary into her account while paying only 10% of the employee’s salary into the employee’s account.
Expert Witness Testimony:
I also provide expert witness testimony involving actuarial calculations including, but not limited to, calculations of actuarial present value of retirement benefits for divorce proceedings.
If you are interested in receiving retirement plan design and non-discrimination testing services or expert witness testimony services, please contact me by email or call me at (850) 294-2252. Of course there is no charge for an initial consultation to determine if my services are valuable to you.
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