Employer. Retirement Plans

Transcription

1 Employer Sponsored Retirement Plans for Small Business

2 Webinar Agenda Why you should set up a plan? Business Benefits Employee Benefits What are the available plans to choose from? Individual Retirement Accounts (IRA) Defined Contribution Plans Defined Benefit Plans Steps to maintain your retirement plan Q&A

3 Preston Sharps Christine Sisler

4 Why Should You Set Up An Employee Retirement Plan?

5 Business Benefits Free Deductible Credit Compounding Interest Better Employees Reduce Costs

6 Employee Benefits Contributions through payroll deductions Employee contributions are Retirement assets can be carried from one employer to another Investment gains are

7 What Types of Retirement Plans are Available? Individual Retirement Accounts (IRA) Defined Contribution Plans Defined Benefits Plans

8 The Basics of IRA Based Plans

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10 Payroll Deduction IRA Employer with employee(s) No annual filing requirement for employer Employee contributions through payroll deductions

11 Payroll Deduction IRA 2011 Annual Contributions: = $5,000 = $6,000 Withdrawals permitted anytime Contributions ti are vested td

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13 SEP IRA Employer with employee(s) No annual filing requirement for employer 2011 Annual Contribution: 25% of Compensation No more than $49,000

14 SEP IRA Employers decide contributions year to year y Must be offered to all employees: At least 21years of Age Employed by employer 3 of last 5 years with compensation of $550/year Withdrawals permitted anytime* Contributions are vested

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16 SIMPLE IRA Salary Reduction Plan with almost & a bank or financial institution handles paperwork Employer with Employees No annual filing requirement for employer

17 SIMPLE IRA Employee salary reduction contributions and employer contributions 2011 Annual Employee Contributions: = $11,500 = $14,000

18 SIMPLE IRA Employer Matching Options: 100% of the first 3% or 2% ofemployee s compensation Withdrawals are permitted anytime* Employee payroll deduction contributions are vested

19 SIMPLE IRA Must be offered to all employees: Who have earned income of at least $5,000 in any prior 2 years Who are reasonably expected to earn at least $5,000 in the current year

20 Basics of a Defined Contribution Plan

21 What is Similar Salary Reduction Plan with almost Permits high level of salary deferrals by employees Employer with employee(s) Plandocument required Annual filing of Form 5500 is required

22 What is Similar Must stbe offered to all employees: ees At least 21 years of Age who worked at least 1,000 hours in previous year Withdrawals permitted after specified events occur

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24 401(k) Contributions 2011 Annual Contributions from Employees: = $16,500 = $21, Annual Contributions fromthe Employer: 25% of Employee s Compensation No more than $49,000 Match Mthamount set by plan document

25 401(k) Requires annual test to ensure plan does not discriminate Employee salary reductions are immediately vested Employer contributions may vest over time

26 Profit Sharing Plan

27 Profit Sharing Plan Discretionary employer contribution set by plan document Contribution is limited to: Lesser of 100% of compensation or $49,000 Contributions may vest over time according to plan document

28 Basics of a Defined Benefit Plan Fixed, pre established benefit for employees Primarily funded by the employer Employer with employee(s) Plandocument required Annual filing of Form 5500 is required

29 Basics of a Defined Benefit Plan An actuary determines annual contributions Employer generally required to make contributions setby plan document Must be offered to all employees: At least 21 years of Age who worked at least 1,000 hours in previous year May vest over time

30 Maintaining Your Retirement Plan 1. Watch for Law Changes

31 Maintaining Your Retirement Plan 2. Perform periodic reviews of your plan 3. Get an independent reviewer to check your plan

32 Maintaining Your Retirement Plan 4. Subscribe to Retirement News for Employers IRS Newsletter Go To and select tnewsletters

33 Q & A My Bank Fanpage: Preston Sharps [email protected] Christine Sisler [email protected]