SERVICES
Five Star Retirement Professionals, LLC offers many retirement plan options
to meet the varied needs of businesses owners across the United States. Our
plans are designed to cover businesses ranging from one-person shops to companies
with over 2000 employees. On average, our client companies consist of approximately
20 employees and the majority of our plans are geared toward small business
owners.
In order to best serve the needs of employers like you, we
will provide you with different plan scenarios based on census
information and other individual factors. We strive to help you
achieve the best choice for your small business and are proud
to offer small business owners assistance in choosing the plan
that’s right for them. Once such a plan is chosen, we take
pride in working with both the employer and investment advisor
to ensure proper plan administration and overall retirement plan
success.
401(k) Plans
Across America, 401(k) plans have become widely accepted and utilized by business
owners. Because they offer excellent tax breaks to employers, while at the
same time providing simple and convenient savings for employees, they have
become quite popular among all types of businesses.
These plans are often designed with features such as participant
loans, eligibility requirements, vesting and distribution options
in order to be flexible and well suited to the needs of diverse
businesses. When such plans are properly designed and implemented,
they can often aid in reducing costs, leading to greater employee
recruitment and retention. For employers, that’s a great
thing.
There are a number of ways in which 401(k) plans can benefit
your business. Most importantly, they offer you as an employer
valuable tax deductions for contributions you make, while allowing
for salary deferrals before federal income taxes for your employees.
In addition, they are an excellent tool for retirement planning,
certain to offer your employees valuable savings, which will
aid them in achieving a secure lifestyle when retirement comes.
This is of great value to you because in many cases such plans
offer incentives to employees to continue a career with your
company, leading to increased employee satisfaction, recruitment
and retention. Of course, satisfied employees are always a benefit
to employers like you. All in all, such plans typically result
in a win-win situation.
Options for 401(k) Contribution
There are two types of contributions made to 401(k) retirement accounts – employee
and employer contributions.
Employee contributions: In order to plan for a comfortable
retirement, this type of contribution allows your employees
to make pre-tax salary deferrals as well as rollover contributions
from other retirement plans.
Employer contributions: As an incentive to your employees,
you can elect to make tax-deductible matching or profit-sharing
contributions on your employees’ behalf. Should you choose
to take advantage of this option, you may find that your employee
retention and satisfaction greatly increase. This is of benefit
to you because satisfied employees make your job as business
owner much easier. Greater morale and less turn over are often
a result of implementing this type of contribution option.
Safe Harbor 401(k) Plans
This type of retirement plan allows for maximum salary deferrals to be made
by highly compensated employees, while avoiding the risk of corrective refunds,
which occur when plans fail the ADP or ACP Discrimination Tests. Many business
owners prefer this type of plan because they automatically satisfy the requirement
of these tests.
Profit-Sharing Plans
These plans are unique in that you, as the employer, are responsible for funding
all contributions and can tailor them at your preference. For instance, profit-sharing
plans may be designed in a number of ways, including offering contributions
to employees in proportion to individual salaries or favoring business owners,
high-income participants or more senior employees.
Another benefit to you is the tax deduction received for contributions made
to such plans.
Methods of Allocation
Some popular methods of profit sharing allocation include Social Security Integration,
Salary Proportionate, Age Weighted and New Comparability, which allow employers
like you to provide different contributions for varied employee segments.
The benefits of profit sharing plans such as those mentioned
above include simple administration, as contributions are typically
made once annually, excellent employer tax breaks and the ability
to make discretionary contributions to your employees’ retirement
savings. |
