Call us at 818-769-4600. Ask for an Actuary. No fee for initial consultation. We will help you fill out the information on employees we need to have to give you advice on plan designs. It probably won't take us over 10-15 minutes to get you to a good place.

If you own a business, and have employees other than you and your spouse (or your partner(s) and their spouse(s)), your approach to adopting a pension plan must be different than if you have no employees. An exception to this rule is if your employees rarely last more than 2 years with you, or work less than 1000 hours per year. In this latter case we can design a plan which is like the setup in the previous section.

Incidentally, you must include leased employees, as well as employees of another company you own or control or are in what is called an "affiliated services group" relationship.

If you have employees who will make it onto your pension plan, you as an employer need to make a decision : is the plan primarily to benefit all employees or do I as an owner intend to make the plan benefit primarily me, with the employees being entitled to the minimum benefits as required by law? Or in-between these two polar positions?

Please keep in mind that it often happens that a business owner will end up personally much better off setting up a pension plan than not setting up a pension plan, even if several employees participate in the plan, simply because there is so much of an income tax write-off connected with the use of a pension plan. So the owners can benefit, and the employees benefit...a win-win situation. The IRS is paying mightily for you and your employees to build up pension fortunes, by way of reducing your income taxes. The IRS and Congress and the Senate, and yes the President all want you and your employees to build up gigantic pension fortunes. And guess what? If you don't adopt a pension plan, then somebody else is getting the benefit of all those taxes you are paying. Let's see...you want a pension fortune, or you don't want a pension fortune...hmmmm, which one should you choose?

Regardless of what position you take on how much contribution you want your employees to get, keep in mind we can gear the pension plan to have other attractive features that will help you in attracting and retaining key employees. We can add on 401k features, help you set up individual investment accounts for employees, allocate a higher share of contributions to certain key employees or classes of employees, and even come out for educational seminars for your employees. You deserve to get a good bang for your pension buck, and we will help you do that with your employees. We are pension experts and actuaries, and we do this all the time.

You can set up a Defined Benefit Pension Plan, a Profit Sharing Plan, a 401k Plan, or a Money Purchase Pension Plan that will accomodate your wishes. Each of these three types have specialized sub-types that are geared to making the best result for owners. Defined Benefit Pension Plans have specialized tools for selecting retirement ages, accrual rates, actuarial equivalence factors, and other which can get the desired result; these plans work best if the owner and spouse are older than the other employees. Age-Weighted and New Comparability varieties of Profit Sharing Plans, 401k Plans, and Money Purchase Pension Plans can get the maximum share of contributions to a selected group, typically the owners and selected key employees, and are generally used where the owner and spouse are much older than the other employees. A 401k Plan is essentially a Profit Sharing Plan (and yes you can choose an Age-Weighted or New Comparability type of Profit Sharing plan as the basis) with an option on top to let employees contribute a part of their salary pre-tax and for you the employer to match part of the employee contribution (if you choose) with some formula related to the employee deferrals. Keep in mind that your employees will benefit from a pension plan. This is truly a win-win situation. If you have under 10 employees, and are older than them, then usually we can design a situation which is win-win (i.e. you will personally have a bigger fortune with the pension plan than without it). Keep in mind also that you may need the pension plan to help you attract and retain skilled employees in this tight labor market. Finally, keep in mind our comments regarding reducing future raises to bring the whole financial package for employees into line for that job position over a short period of years.

We can, and do, use Defined Benefit Pension Plans, which require an Actuary. Defined Benefit Pension Plans provide much more flexibility in the maximum contributions each year than do Profit Sharing Plans or Money Purchase Pension Plans.

401k Plans have their own special attraction, and we are happy to help you with these plans. Normally you will set up the investment program with a mutual fund house or a brokerage firm, and we will do the testing and the year end government reports required, as well as prepare plan documents and amendments.

Here's an example that might influence you. We have a client who is now a little beyond age 65 and is still going strong and has no intentions of ever retiring, who had a Defined Benefit Pension Plan for about 30 years, and put in for herself about $20,000 per year. She put in about $10,000 per year for other employees. She now has $4.2 million in her own plan...this cost her $ 30,000 x 30 years = $900,000. Hmmmm...We have fudged the results to disguise the client, but the point is there: if she had not set up a pension plan, she would never have saved the money.....would you? And how about all her employees who benefitted over the years from her Defined Benefit Pension Plan...how do you value this in the equation for your company?

Be honest, do you actually put money into an investment account? Even if you do, will you spend this money at the first opportunity? Is the amount you put in as big as the amount you would put into a pension plan? If it is in a pension account, you are much less likely to spend it, statistically. You are also far more certain to actually build up your pension fund than you are a personal account. And think of your employees...if you have a hard time disciplining yourself to save, your employees have an even harder time. Do you know that employee participation rates in 401k plans are quite high? You may think that your employees won't participate, but they may fool you! And that if you put monies in to a pension plan for employees, and later on give lower raises to compensate, what you have really done is help the employees save for their futures. Same total package, but now some of it goes into a pension plan, and you know the IRS is giving a big tax gift to your employees in the pension plan.

We don't use the Standardized Adoption Agreements used by banks, brokerage houses, and mutual fund families. These Standardized plans are quite simple to fill in, but they don't meet the business owner's usual objectives nearly as well as do our Non-Standardized plans documents. This is important if you don't have employees, and is also very important if you do have employees.

Call us at 818-769-4600. Ask for an Actuary. We'll ask you for your census (a list of employees, showing dates of birth, hire, if they work over 1000 hours per year, and Compensation). We'll work out your objectives with you. We'll then show you the options you have for a pension plan. Then you get to choose. Wouldn't you like to have all of the information available, from pension experts and actuaries, instead of a fragmented section of the picture, from folks whose main business may be something other than pension administration?

We'll help you fly, and we make good co-pilots over the years.