Sample Plan Designs
One Owner, Two Staff
This design was completed for an owner and his two staff employees. We were able to maximize the owner with a $210k CB credit and the $70k DC maximum allowable contribution. The fact that he had a younger employee allowed this plan design to pass non-discrimination testing.
*note that this plan was not subject to the combined deduction rules which limits the DC contribution to 6% of wages
Two Owners, Four Staff
This client had already established a safe harbor 401(k) plan and wanted to add a Cash Balance Plan to increase the benefits by targeting the owners. We were able to maximize the owners to their respective limits and by giving the eligible staff 2% in the Cash Balance Plan. The previously established DC plan had very lenient eligibility requirements, which allowed Staff 3 to defer and receive a 3% safe harbor contribution. Staff 4 is Highly Compensated for 2025 and was excluded from the CB plan.
*note that this plan was subject to the combined deduction rules which limits the DC contribution to 6% of wages
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