In an earlier episode of this series, we talked about comparability profit sharing plans. Then in our last episode, we talked about defined benefit plans. Think of the cash balance plan as a hybrid of these two plans. So let’s compare some points of the three plans, in no particular order of importance:
I’ve enjoyed writing the Spring/Summer Series, in part because it reminds me how complex the world of pensions is. You can’t really do justice to it in 500 words on each topic, or at least I can’t. I tried to keep things brief and interesting. I’m always happy to answer any questions, especially those that arise because my writing was too brief. (Or too interesting!) And I’m always happy to provide a proposal for your client. Let’s do some business together!
Next up: related examples of plan design that are not technically part of the Spring/Summer series. Which is good, because Spring/Summer is just about over.
Just a short note between Defined Benefit Plans and Cash Balance Plans, because we have an important deadline coming up.
We talked about safe harbor 401(k) plans, which are very common among small businesses that have a 401(k) plan. They fill a very important need. But new safe harbor 401(k) plans must be adopted by October 1 of their first year. In order to meet that deadline, we need to get started now.
Please contact me if you have clients who may benefit from a safe harbor 401(k) plan.
#401k #Safe Harbor Plans