Plan Design and Installation
Plan design is the first and most essential task in the creation and operation of a qualified plan. Documents must be drawn up with specifications tailored to meet the individual client’s objectives. This legal document creates a “qualified” retirement program and directs its operation. When a plan is qualified, all contributions will be deemed tax deductible.
The plan and trust are divided into two sections: (1) Plan Provisions, and (2) Trust Provisions. The plan provisions relate to the plan’s operation and administration such as eligibility requirements, allocation of contributions, determination of projected retirement benefits, plan and participant termination procedures, etc. The trust provisions explain the procedures for administering the plan assets, including: the fiduciary responsibilities of the trustee(s), the types of permissible investments, the accounting of trust assets, and authorization to direct the funds held under the trust.
PENSIONS CENTRE provides complete administrative services. Our highly trained staff of account administrators offer personalized service and are organized into teams to ensure quality and consistency. Our team managers are educated in all areas of plan administration. They understand the many facets of the plan document and its relationship to the trust.
Our consultants and plan administrators spend many hours researching new federal and state legislation, interpreting the impact of various legislation and IRS regulations. We scrutinize all available information and client data, such as salary levels, the average age of the client’s workforce, which employees are considered favored, and individual ownership structure, for example, so that we can provide the optimal design and ongoing administration for the benefit of our plan sponsors. Our experienced administrators keep clients and their advisors informed of the most current issues affecting their plans.
Listed below are the major services provided by our consultants:
- Complete actuarial valuation to determine deductions for defined benefit pension plans.
- Determine actuarial assumptions, equivalents, and methods used in the annual administration of a qualified plan to maximize pension for owners and key employees and minimize costs for other employees. Compare plan assets to merging liabilities.
- Determine annual contribution to discretionary profit sharing plans, money purchase plans, and 401(k) plans. Certain profit sharing plans may take into account the current age of the owner(s) and employees, some may utilize an approach that “integrates” with the annual Social Security Taxable Wage Base. The formula for allocating employer contributions will be discussed with each client and included in the plan document.
- Prepare annual statement of market value of plan assets and provide a reconciliation of net worth, allocate contributions, forfeitures and trust fund investment income for each participant. Based on the desires of each client, some plans may call for a pooled, or pro-rata, allocation of fund earnings while some may permit individual employee investment. We will assist in the annual update of each Participant’s account balance and vested account balance.
- Prepare annual benefit statements and/or account balance statements for distribution to participants and provide copies for trust records.
- Calculate participant’s vested entitlements, provide a notice of tax consequences, and prepare required distribution forms, i.e., Forms 1099R for tax reporting in the case of termination of employees or a terminated plan.
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We have offices in all 50 states.