The design of a retirement plan drastically affects both who benefits under the plan as well as the value of the benefit received by those who do participate in the plan. If your goal is to maximize the retirement benefits provided through qualified plans sponsored by your company as well as to potentially skew benefits in favor of a specific group of employees or give disparate benefits to different groups of employees, a plan design that should be considered is to combine a 401(k)/Profit Sharing plan with a Cash Balance Plan. Although this design results in the creation of two distinct plans that each require separate administration, testing and plan documents; it also provides an opportunity to maximize the benefits provided under both plans.

What is a Solo 401(k) Plan?

A Solo 401(k) plan is a 401(k) plan for a self-employed individual, partnership, or a business owner with no employees. In general, a spouse who is an owner or employee of the plan sponsor may also participate.

Download PDF      Legacy Retirement Solutions LLC was fortunate enough to participate at the 15th Annual National Association of Pension Advisors (NAPA) last month in Nashville, TN. We sponsored a booth which enabled us to talk to pension advisors as well as other retirement plan professionals regarding the important services a third party administrator brings…