Call us at 818-769-4600. Ask to speak to an Actuary. No fee for initial consultation.

If you own a business, and report either as a sole proprietorship (i.e. use a Schedule C attached to your 1040 tax return) or as a partnership, or report as a corporation (either sub-S or a regular C corporation), then you can have a pension plan. LLCs and LLPs are fine.

Any questions on your business? Call us.

If you are a sub-S corporation, and all of your income is reported as"pass-through" income, then you can't use this "pass-through income" as earned income for purposes of justifying a pension contribution, so you may not be able to have a plan. However, many sub-S corporations pay part of the income as "pass-through income", and part as Compensation, which then allows you to have a pension plan. A Defined Benefit Pension Plan needs only a relatively small Compensation to justify a large deductible contribution.

A pension plan can cover multiple companies that you own: for example, if you have a corporation, or two, and also a sole proprietorship, you can have one pension plan cover all three entities. This gives you the right to make contributions from each entity, which can be important as conditions change from year to year. This can be especially useful if there are several owners. It is easy to cover several companies in one pension plan. This buys you more choices as to where the contributions can come from, although you have to follow the rules.

If you are an independent contractor, such as a real estate agent, you can have a pension plan. However, if you also own a share of the real estate company which has employees, then it might be required that the real estate company has to be the one to adopt a pension plan in which you can participate. We have done this quite often.

As another example of an independent contractor, we have several clients who contract with individuals for services; these individuals may work full time in concert with our client, but are highly paid on a piecework/sales basis, make their own hours and have their own locations of work, etc. As independent contractors, they can have separate pension plans.

Business managers, CPAs, directors, producers, fashion photographers, leasing companies, actors, attorneys, directors, doctors, architects, engineers, writers, lighting consultants, elevator manufacturers, business consultants, etc, etc. Everybody qualifies provided you meet the requirements in the second paragraph above.

If you own a business, and your spouse owns a different business, you have a controlled group situation. We need to look at the employees of both businesses.

If you own or control several businesses, we need to look at your ownership and control, both from a "controlled group" basis, and an "affiliated services group" basis.

If you have leased employees, you MUST include them as eligible for the pension plan, unless the leasing organization provided significant pension benefits. You can't keep employees off the plan simply by hiring them through a leasing company.

If you own a business, and have independent contractors working for you, you don't need to cover them. However, be sure they really are independent contractors...the IRS may disagree with you, and classify these people as employees.

Bands often have a touring corporation, and may also lease employees. The owners must consider all of the employees unless there are unusual circumstances.

Any doubts, or questions? Call us at 818-769-4600. Ask for an Actuary. We'll get the basics from you, and then let you know what you might do. No charge for initial consultation. How will you fly if you never spread your wings? Oops, get in the plane. A literal lateral latterly.