The benefit of this is twofold: The owner gets a substantially higher initial tax deduction and the defined benefit plan
now has some extra cushion to allow the owner to reduce future contributions should the business suffer a slowdown.
For example, the chart shows that 39 percent of all workers in the broad financial activities industry are covered by a defined benefit plan
The 412(e)(3) defined benefit plan
receives $80,000, and the 401(k) profit sharing plan receives $20,000.
If it is appropriate for your situation, a defined benefit plan
can help you reduce taxes, strengthen your business, and secure your financial future.
Service's ruling: The IRS concluded that the demutualization assets could be treated as defined benefit plan
assets for Sec.
Public employers who have moved from a defined benefit plan
to a defined contribution plan have found that the new program can offer better cost control, greater flexibility and increased employee satisfaction in their retirement program.
Governmental employers are using a variety of alternative approaches for making their defined benefit plan
obligations more manageable and/or the plan design more responsive to employee needs.
According to Shapiro, the key advantages of defined benefit plans
for small business owners are:
Retirement plans that we think of as traditional pensions are called defined benefit plans
New TowerGroup Research Explores Pension Protection Act's Impact on Defined Contribution and Defined Benefit Plans
The Treasury and IRS issued final regulations regarding minimum distribution rules for defined benefit plans
and annuity products purchased with account balances in other types of qualified retirement plans and IRAs.
And as employees seek to hold their employers accountable for past pension plan losses during the market slide, the rules could also provide more information to fuel fiduciary lawsuits--one more blow to already beleaguered defined benefit plans