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There is a limit on the annual benefit that can be paid out under a Defined Benefit plan. If that limit was not reached in the prior plan, we can run an illustration for you to determine whether it makes sense for you to open another plan. As with take over plans, a complete analysis of the prior plan is required.

If the investments earn more than the assumed interest rate in the plan, the maximum contribution allowed will be reduced. If this continues over time, you will be required to make lower contributions into the plan to achieve the goal.

Yes. Elective deferral contributions and profit sharing contributions of not more than 6.0% do not count against the deductible limit described above. As long as the 401(k) plan is limited to salary deferrals and employer contributions of not more than 6.0%, you can make contributions to both plans.

Generally, yes. If you own other businesses and you are considered part of a controlled group or affiliated service group, then all businesses must be covered under the plan.

All eligible employees must be included in a Defined Benefit plan. Generally, we will recommend using a Cash Balance plan and a 401(k)/ Profit Sharing plan if there are non-family member employees. By combining the two plans, depending on the ages of the employees, we can often control the cost of providing benefits for employees. In addition, selecting a 1-year/1000 hours entry requirement will prevent any part-time employees from entering the plan.