| 
A qualified plan must meet a certain set
of requirements in the Internal Revenue Code such as minimum
participation, vesting and funding requirements. In return,
the IRS provides significant tax advantages to encourage businesses
to establish retirement plans including the following:
|
Employer contributions to the plan are tax deductible. |
|
Earnings on investments accumulate
tax-free which allows contributions and earnings to
compound at a faster rate. |
|
Employees are not taxed on the contributions and earnings
until they receive the funds. |
|
Employees may make pretax contributions to certain types
of plans. |
|
Ongoing plan expenses are tax deductible. |
In addition, sponsoring a qualified
retirement plan has the following advantages :
|
|
Attracting: Attract
experienced employees in a very competitive job market--retirement
plans are fast becoming a key part of the total compensation
package. |
|
|
Retaining … motivating:
Retain and motivate good employees--you don't want to
lose them to your competitors because of the qualified
plans they are offering. |
|
|
Helping: Help
employees save for their future since Social Security
retirement benefits alone will be inadequate to support
a reasonable lifestyle for most retirees. |
|
|
Protecting: Plan assets are protected
from creditors. |
Employers can choose between two basic types
of retirement plans, defined benefit
and defined
contribution , both of which may be sponsored to maximize
benefits.
Our consultants can help you choose the right plan for your
company. Contact us for more
information.
|
