Retirement Plans
Most employers know that retirement plans are a key factor to retain valuable employees. At Employer Concepts, we do the groundwork to insure that your retirement program meets your needs. We have created a relationship with one of Southern California's premier pension administrators, Benefit Equity, to ensure that we stay at the forefront of this arena. Please feel free to visit their site at benefitequity.com. (In c licking that link, you will be leaving the Employer Concepts Insurance Services, Inc. website and you will be viewing material from another website that may not be regulated by the National Association of Securities Dealers and the Securities Exchange Commission.)
Simple IRAs
Though the word "simple" was not intended to imply simplicity, this form of retirement program is indeed the least arduous. This plan allows employees to defer up to $10,000 in 2006 on a pre-tax basis. The employer is required to participate in the plan too, but 100% of this money goes to the employee NOT to plan administration. Please ask us for more details about this relatively new program.
401K Plans
A 401K Plan is a unique type of employee benefit plan with special characteristics that make it enormously popular with both employees and employers. It is the benefit plan that allows employees to defer salary today to save for retirement on a tax-deferred basis. Employers like 401K plans because they are flexible and cost-effective. The employee's deferrals and any employer contributions are tax-deductible for the employer and are not included in the employee's gross income, though they are subject to payroll (FICA & FUTA) taxes. Withdrawals from 401K plans and IRA's prior to age 59 1/2 may be subject to a penalty.Your employees under 50 are eligible to contribute $15,000 per year and those 50 and older can contribute up to $20,000 under the catch-up provision.
Pension Plans
These retirement plans, unlike Profit Sharing Plans, require mandatory company contributions. There are several types of Pension Plans.
Money Purchase Pension Plan
The employer establishes a contribution rate, generally between 1% and 25% of compensation. Once the contribution formula is established, a formal amendment to the plan must be completed to change the formula. In addition to the employer contribution, some plans allow for after-tax participant contributions. These plans can also be established without any employer contribution, only after-tax employee contributions. These programs are referred to as Thrift Plans. Thrift Plans are not very popular today because of the widespread use of pre-tax deferrals through 401K Plans. These plans are used by employers that want to commit to a fixed contribution formula. Money Purchase Plans can be used in addition to or in combination with Profit Sharing or 401(k) Plans.
Defined Benefit Pension Plan
Before 401K Plans, these plans were the most popular pension plans in America. They still remain the basic retirement plan for most large corporations.
Other Types of Retirement Plans
All other types of retirement plans do not have any limitation on the amount you can earn on your investments. There is also the downside of not earning very much or even losing money. The only guarantee in other retirement plans would be the purchase of fixed annuities through insurance companies.
The small print
Securities Offered Through Mutual Service Corporation, Member NASD & SIPC
This is not an offer to sell securities, which may be done only after proper delivery of a prospectus and client suitability is reviewed and determined.
Information relating to securities is intended for use by individuals residing in CA only.
