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July provides custom plan design to meet your goals.
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Defined Benefit Plans
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Defined Benefit Plans allow employers to assure employees of their retirement income by defining the benefit at retirement age. To fulfill the benefit (or promise to pay at retirement), these plans require annual contributions determined by an actuary. Defined Benefit Plans can sometimes allow employers to fund much larger contributions than 401(k) Plans and other defined contribution plans. |
Contribution Options |
| Defined Benefit Plans are employer funded plans, and employees are not allowed to make contributions. Contributions to defined benefit plans are not discretionary, and they are calculated each year by an actuary based on changing factors such as interest rates, current plan assets, and projected benefits. |
Why choose a Defined Benefit Plan? |
| Larger contributions. Defined benefit plans can allow employers to fund much larger contributions than profit sharing or 401(k) plans. Employers can currently fund for a maximum retirement benefit of up to $160,000 per participant. |
| Certain benefit at retirement.
The amounts that participants will receive at retirement are determined (or defined) upon becoming a participant in the plan, and are not based on future investment returns. |
| Tremendous tax savings. Because defined benefit plans allow for larger employer contributions, employers receive larger tax deductions for contributions. |
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Important Considerations |
| Employers bear investment risk. Because the retirement benefits are guaranteed by the plan, the employer bears the investment risk. If the trust experiences an investment loss for a particular year, the employer may be required to fund larger contributions so that the plan is fully funded. |
| Company profits not required for contributions. Because the benefits that participants receive are defined by the plan document, contributions may still be required during a plan year in which the employer does not make a profit. |
Fluctuation of contributions. There are a number of actuarial factors that affect the annual funding amount. These factors are not always predictable and can cause required contributions to fluctuate each year.
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PAYROLL SERVICES
July offers complete payroll outsourcing, including direct deposit, complete tax management services, and full integration with your retirement plan. A single provider for retirement and payroll services reduces your work load and increases satisfaction.
RESOURCE CENTER
The plan resource center provides helpful access to important
information including plan limits, plan features, terminology, and tips to avoid mistakes.
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