Plans We Support
As plan consultants, we believe the most important thing we can help you get right is the design of your company’s retirement plan. A well designed plan that fits your size, savings and tax benefit goals has the potential to create successful outcomes later. That’s another way of saying it’s not a one-size-fits-all world.
At INTAC, we offer a wide variety of qualified plans and we’ll customize a plan design focused on what you need, not on what may be easiest for us to manage. And we don’t stop there. We’ll work with you every year to make sure the plan provisions continue to meet your needs.
Types of Plans We Support
401(k) Plans
A 401(k) plan is a defined contribution (DC) plan, typically a profit sharing plan that contains a cash or deferred arrangement as described in section 401(k) of the Internal Revenue Code. A cash or deferred arrangement is simply one that allows plan participants to elect to defer a portion of compensation, their elective deferrals, and have it contributed to the plan on their behalf, typically through payroll withholding.
The employer may contribute to the plan by matching all, or a portion, of the elective deferrals or by making non-elective, or profit sharing, contributions to all eligible participants.
401(k) plans are ideal for:
- Employers who are initiating a plan due to employee demand
- Employers wishing to maximize contributions
- Employers wishing for discretionary contributions
Safe Harbor 401(k)
Safe harbor 401(k) is one of the most significant pieces of retirement legislation that has emerged in the last several years; it is also one of the most popular 401(k) plan designs amongst small business owners. A safe harbor 401(k) plan is very similar to a traditional 401(k) plan; the primary difference is how a safe harbor plan satisfies the IRC’s nondiscrimination requirements.
Important conditions must be met in order to establish a safe harbor retirement plan, including a required, non-elective employer contribution that is 100% immediately vested and annual written notification to all participants.
Safe Harbor 401(k) plans are ideal for:
- Small business owners
- Employer plans that have a low rate of participation
- Plans that have difficulty satisfying IRS nondiscrimination testing
New Comparability/Cross-tested
New Comparability plans, often referred to as cross-tested plans are a hybrid plans that combine features of both defined benefit and defined contribution plan generally to skew the employer contributions in favor of the older, higher paid employees. These plans provide the ability to create multiple benefit levels and are flexible in their contributions.
Cross-Tested Plans are ideal for:
- Smaller businesses
- Employers who are older than some employees
- Employers desiring larger contributions for themselves and possibly other key employees
- Employers desiring flexible contributions
ERISA 403(b)
A 403(b) plan (also called a tax-sheltered annuity or TSA plan) is a retirement plan offered by public schools and certain 501(c)(3) tax-exempt organizations. Employees save for retirement by contributing to individual accounts. Employers can also contribute to employees’ accounts.
403(b) plans are ideal for:
- Organizations who wish to offer flexibility in contributions
- Organizations who wish to allow their employees to defer some of their salary, but may not wish to make employer contributions
Defined Benefit
A Defined Benefit plan (DB) is considered a traditional pension plan because it guarantees a monthly pension benefit for the life of the participant. A DB plan does not maintain account balances to reflect the accrued benefit of each participant, but must define a benefit formula and how the benefits are accrued under that formula. This type of plan favors older employees with longer terms of service.
Defined Benefit plans are ideal for:
- Employers who are older and have more service than other employees
- Employers wishing to maximize contributions
- Employers with substantial resources
- Employers with stable income
Cash Balance
A Cash Balance plan is a type of Defined Benefit plan. By taking advantage of age and salary differences, a Cash Balance plan tilts the contributions towards a desired employee or group of employees. Unlike a traditional Defined Benefit Plan however, a Cash Balance plan provides a “hypothetical” account balance for the participants which accrues interest at a pre-defined government rate.
Cash Balance Plans are ideal for:
- Employers who are older than some of the staff employees
- Employers desiring larger contributions for certain classes of employees
- Employers with substantial resources
- Employers with stable income
About Qualified Plans
A qualified retirement plan must meet certain requirements in the Internal Revenue Code such as minimum participation, vesting and funding requirements. In return, the IRS provides significant tax advantages to encourage establishing and maintaining a retirement plan which include:
- Tax deductible employer contributions
- Allowing earnings on investments to accumulate tax-deferred which, in turn, enables your investment to compound at a faster rate
- Tax deductibility for ongoing plan expenses
Client Testimonial
In addition, qualified retirement plans are fast becoming a key part of a successful business infrastructure and offer choices that help:
- Attract and retain experienced employees in a very competitive job market
- Employees save for their future since Social Security retirement benefits alone may be an inadequate source to support a reasonable lifestyle for most retirees
- Protect plan assets from creditors