Grow Your Business WITH Cash Balance Plans

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1 FINANCIAL ADVISORS Grow Your Business WITH Cash Balance Plans CashBalanceDesign.com (877) CB-Plans

2 SAMPLE ILLUSTRATION 2016 Name Age Annual Salary 401(k) Profit Sharing Cash Balance Total Contribution Tax Savings* Group 1: Owners Owner 1 60 $265,000 $24,000 $35,000 $0 to $235,000 $294,000 $132,300 Owner 2 50 $265,000 $24,000 $35,000 $0 to $137,000 $196,000 $88,200 Owner 3 40 $265,000 $18,000 $35,000 $0 to $80,000 $133,000 $59,850 Owner 4 35 $265,000 $18,000 $35,000 $0 to $61,000 $114,000 $51,300 Subtotals $1,060,000 $84,000 $140,000 $513,000 $737,000 $331,650 Group 2: Staff > $115,000 3% of pay Employee 1 50 $165,000 $4,950 $0 $4,950 Employee 2 45 $125,000 $3,750 $0 $3,750 Group 3: Staff 7.5% of pay Employee 3 65 $80,000 $6,000 $1,000 $7,000 Employee $20,000 $1,500 $1,000 $2,500 Subtotals $1,140,000 $0 $72,450 $18,000 $90,450 $40,703 Grand Totals $2,200,000 $84,000 $212,450 $531,000 $827,450 $372,353 * Assuming 45% tax, varies by state. Taxes are deferred. Percent of Contribution to Owners: 89% In the crowded 401(k) marketplace, the Cash Balance Coach program allows you to bring something unique to your clients. Become certified as a Cash Balance Consultant through our self-paced online learning program: a four-part webinar series and certification exam. The program fee of $199 includes one year of access to our Cash Balance Resource Library. Cash Balance Consultant (CBC) Learn more or enroll today at CashBalanceCoach.com or call (877) CB-Plans.

3 Accelerate Retirement Savings with a Cash Balance Plan Many business owners and high-income professionals want to increase their pre-tax retirement contributions. But there are IRS limits of $18,000 in 401(k) plans and $53,000 in Profit Sharing plans. Now you can do much more to help your high-income clients. Examples of pre-tax contributions: A 45-year-old business owner could contribute $158,000 to his retirement plans. A 55-year-old professional could contribute $239,000 to her retirement plans. A 62-year-old partner would contribute $321,000 to his retirement plans. The actual contribution amount is dependent on IRS compliance testing. What is a Cash Balance plan? A Cash Balance plan is an IRS-qualified (tax-favored) retirement plan that combines the high contribution amounts of a defined benefit plan with the look, feel and portability of a defined contribution plan. How does a Cash Balance plan work? In a Cash Balance plan, each participant has an account that grows annually in two ways: with an employer contribution and with an interest credit on previous contributions. Employer contributions are determined by a formula specified in the plan document, and can be a percentage of pay or a flat dollar amount. How are Cash Balance plan investments handled? The annual interest crediting rate (ICR) is written into the plan document and is guaranteed. The ICR is often tied to a benchmark such as the 30-year Treasury Rate, which in recent years has been around 4%. Thanks to recent law changes, another option is to use the actual rate of return on plan assets. Can Cash Balance plans be offered in addition to 401(k) Profit Sharing or other plans? Yes, employers can offer a combination of plans. In most cases, a Cash Balance plan is combined with a 401(k) Profit Sharing plan in order to maximize contribution levels and optimize tax efficiency. Seven key benefits of Cash Balance plans: Reducing taxes: Business owners can save significantly on corporate and personal taxes. Accelerating retirement savings: Many owners can double or even triple their pre-tax retirement savings. Attracting and retaining top talent: Adding a Cash Balance plan can make a firm s retirement package much more appealing to future partners and employees. Flexibility: Not everyone needs to participate in a Cash Balance plan. Different contribution amounts can be specified for different participants or groups. Easy to understand: Unlike traditionally complex defined benefit plans, Cash Balance plans offer clarity with individual participant accounts and statements. Portability: Participants can roll over their Cash Balance accounts into an IRA or another qualified plan. Asset protection: Cash Balance plan assets are protected from creditors in the event of bankruptcy or lawsuits.

4 Age 2016 CONTRIBUTION LIMITS 401(k) with Profit Sharing Cash Balance Total Tax Savings** Above 65 $59,000 $245,000+ $304,000+ $136, $59,000 $245,000 $304,000 $136, $59,000 $250,000 $309,000 $139, $59,000 $256,000 $315,000 $141, $59,000 $262,000 $321,000 $144, $59,000 $248,000 $307,000 $138, $59,000 $235,000 $294,000 $132, $59,000 $223,000 $282,000 $126, $59,000 $211,000 $270,000 $121, $59,000 $200,000 $259,000 $116, $59,000 $190,000 $249,000 $112, $59,000 $180,000 $239,000 $107, $59,000 $170,000 $229,000 $103, $59,000 $161,000 $220,000 $99, $59,000 $153,000 $212,000 $95, $59,000 $145,000 $204,000 $91, $59,000 $137,000 $196,000 $88, $53,000 $130,000 $183,000 $82, $53,000 $123,000 $176,000 $79, $53,000 $117,000 $170,000 $76, $53,000 $111,000 $164,000 $73, $53,000 $105,000 $158,000 $71, $53,000 $100,000 $153,000 $68, $53,000 $94,000 $147,000 $66, $53,000 $89,000 $142,000 $63, $53,000 $85,000 $138,000 $62, $53,000 $80,000 $133,000 $59, $53,000 $76,000 $129,000 $58, $53,000 $72,000 $125,000 $56, $53,000 $68,000 $121,000 $54, $53,000 $65,000 $118,000 $53, $53,000 $61,000 $114,000 $51,300 Under 35 $53,000 Up to $58,000 Up to $111,000 Up to $49,950 I ve used Cash Balance plans to help high-income clients significantly improve retirement savings while cutting taxes. That s a huge advantage to me as an advisor. Sean G. Williams, Financial Advisor *401(k): $18,000; $6,000 catch-up; $35,000 profit sharing **Assuming 45% tax, varies by state. Taxes are deferred. How Financial Advisors Can Grow Their Businesses with Cash Balance Plans Everything you need to know about the Cash Balance business in one compelling book, written expressly for advisors by the Kravitz Cash Balance Coaches. Packed with useful tips, clear explanations, case studies and checklists, it s an invaluable tool for anyone seeking success in the retirement plan field. Download a free chapter and read reviews at CashBalanceBook.com. Available at:

5 About Our Firm Since 1977, Kravitz has brought its clients the latest in design, administration, and management of corporate retirement plans. Today, Kravitz administers more than 1,200 plans with $4.5 billion in assets, helping over 150,000 people retire successfully. Headquartered in Los Angeles, Kravitz has offices in New York and satellite offices in eight other cities. Why Choose Kravitz for Cash Balance Plans? Cash Balance plans are sophisticated, complex retirement plans that require specialized actuarial expertise. With significant tax deductions and IRS compliance issues at stake, plan sponsors need an experienced administrator with a record of long-term success. We suggest you consider the following key areas: Length of experience. Our first IRS-approved Cash Balance plan was in Breadth of experience. We have Cash Balance clients across all industry sectors, ranging in size from one to over 1,500 plan participants. Volume of plans. We currently administer more than 500 Cash Balance plans and have successfully designed and administered hundreds of others over the past 25 years. Industry knowledge. Our Cash Balance clients have included more than 450 law firms, 400 medical groups and hundreds of small to midsize companies. Focus of expertise. Our primary focus is Cash Balance plans. National thought leadership. We are recognized as the nation s leader in Cash Balance plan design, offering the only available certification program, Cash Balance Coach. We also published a well-received book on the topic and offer frequent webcasts and regulatory updates. Investment expertise. We understand the balance between plan design and investment dynamics. We work with financial advisors to structure the right investment strategy. We offer both Actual Rate of Return and traditional safe harbor Interest Crediting Rate (ICR) options. TPAs: Kravitz can help you create your own branded, private label Cash Balance product for clients. A simple and affordable way for Third Party Administrators to get into the Cash Balance business without the high cost of software acquisition and actuarial consulting. Visit KravitzBackOffice.com to learn more about our innovative back-office actuarial solutions and seamless plan administration services. Get started with a free TPA account and free plan designs, and you can be in the Cash Balance business today Kravitz, Inc. All rights reserved. For more information about Cash Balance plans, visit CashBalanceDesign.com or call (877) CB-Plans.

6 Online Access to Cash Balance Accounts, 24/7 Kravitz clients enjoy the nation s first ever Cash Balance mobile retirement center, a seamless web-based service with an optional direct link to 401(k) accounts. This innovative, intuitive portal gives participants, plan sponsors and advisors instant access to Cash Balance accounts, updated daily. While daily access has been available to 401(k) plans for many years, the complexity and actuarial requirements of Cash Balance plans were barriers to online access. Kravitz developed a custom software solution to overcome these limitations. Simplicity & Clarity: The Kravitz Cash Balance Portal Makes Life Easier Simplified online administration for plan sponsors 24/7 access to Cash Balance plan balances and account information Instant electronic distribution of plan notices, forms and participant communications Streamlined, simple way for participants to update personal information, request withdrawals, change beneficiary designation and other details Enhanced experience for plan participants: being able to see their money daily and create on-demand statements Three custom-designed portals for the participant, plan sponsor, and advisor CashBalanceDesign.com (877) CB-Plans Los Angeles New York Chicago Atlanta Las Vegas Denver Portland Salt Lake City Ann Arbor Honolulu Phoenix San Diego Charleston Naples