Business Group Plans
Types & Uses
of Retirement Plans for Business/Group/Employees*
Simplified Employee Pension (SEP) Plan: For self-employed
people and small business owners who wish to make tax-deductible contributions
of up to $40,000 or 25% of their income, whichever is less, and that
of their eligible employees.
Simple IRA Plan: For firms
of 100 or fewer employees to establish
an employee savings program for pre-tax
contributions of up to $7,000 per year.
Profit Sharing Plan (Keogh** Plan):
For business owners who wish to make tax-deductible
contributions of up to 15% of each participant's
pay, and have vesting and loan schedules
not available with a SEP.
Money Purchase Pension Plan (Keogh** Pension Plan): For business owners
with predictable incomes who wish to make pre-determined tax-deductible contributions
of up to 25% of each Participant's pay.
Age-Weighted or Comparability Plan: For business owners who
are older and more highly paid than most of their employees and wish to allocate
contributions under a formula based on both age and salary.
Defined Benefit Pension Plan: For business owners who wish to
contribute enough money each year to provide a specific benefit upon retirement.
This may be beneficial to older employees with a high, stable income who need
a rapid accumulation of assets over a short period of time.
401(k) Plan: For employers who wish to allow employees to make
pre-tax contributions through payroll deductions of up to $11,000 per year or
25% of their pay, whichever is less.
Safe Harbor or DASH 401(k) Plan: For business owners who wish
to give their employees the advantages of a 401(k) plan, while maximizing the
amount they can put away for themselves.
403(b) Plan: For employees of public schools, non-profit hospitals
and other certain tax-exempt organizations. Also known as a Tax-Sheltered Account.
Our agency does not provide legal or tax advice. For specific legal or tax advice
based on your situation, please contact your attorney of tax advisor.
** The term "Keogh" or "HR-10" describes any type of retirement
plan established by an nincorporated business - whether it be a profit sharing,
money purchase or defined benefit plan.