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Qualified Retirement
Plans
The Basics
Summit
Trust Company offers a full range of Qualified Retirement Plan
Administration. We are committed to
excellence in Plan compliance and administration. We provide plan
consulting, document design, defined benefit plans, pension
and profit sharing plans, 401k plans, 412(i) plans, SEP’s and other
types of
plans. Summit Trust combines technical expertise, experience and
technology
capabilities to provide services to our pension and profit sharing plan
clients. We are able to serve clients
in multiple states, with participants numbering 1 to 3,500. We do
not
require a minimum number of participants.
Defined Benefit Plan
A defined benefit plan is always a pension plan. This type of
retirement plan is structured to provide a participating employee with
a specific benefit amount upon attaining the normal retirement age
specified in the plan. An employee's future benefits are determined by
means of a formula. The employer is guaranteeing certain
benefits. Fluctuations in the stock market have no bearing on the
participant's balance at retirement.
Cash Balance Pension Plan
A hybrid defined benefit plan that has some of the features of a
defined contribution plan. The most distinguishing feature of a cash
balance pension plan is its use of a separate account for each
participant. The plan sponsor is responsible for investment decisions.
Investment risk (market fluctuation) is borne by the plan sponsor not
the participant.
Defined Contribution Plans
General
A defined contribution plan defines the contribution the company will
make to the plan. Contributions are usually based on a percentage
of eligible employees' compensation. The minimum and maximum
employer contributions vary by type of plan.
Separate account balances are maintained for each eligible
employee. The employee's account grows through employer
contributions, investment earnings and in some cases forfeitures
(amounts from the non vested accounts of terminated participants that
may be reallocated to the remaining participants). Some plans may
also permit employees to make contributions on a before-and/or
after-tax basis.
The participant's retirement, death or disability benefit is based upon
the amount in his account at the time the distribution is payable.
The maximum annual addition to an employee's account (taking into
consideration all defined contribution plans sponsored by the employer)
is subject to limitations. Compensation that may be considered
for plan purposes is also capped. These maximums are adjusted for
cost of living increases annually.
Profit-Sharing Plan
An
employer providing this type of plan will allow its employees to
participate in the employer's profits. Contributions to the plan are
made by the employer utilizing a predetermined formula.
401(k) Plan
A
401(k) plan, also referred to as a "cash or deferred arrangement"
(CODA) or "salary reduction plan", is an arrangement under which an
eligible employee may elect to have a portion of his or her salary
withheld from the paycheck and deposited directly into the company's
retirement plan. Generally, deferred amounts are not considered to be
employee contributions and are not includable in the employee's gross
income or wages for federal and state withholding purposes. The
employer may, but is not required to, make contributions to the plan.
Participants age 50 and older are eligible to make "catch up"
contributions to their plan. Click here
to learn more about 401(k) Plans.
Money Purchase Pension Plan
A
money purchase plan (a defined contribution pension plan) is a
retirement plan other than a profit-sharing or a stock bonus plan, that
provides for fixed or determinable contributions by the employer and
individual accounts for each participant.
SEP (Simplified Employee
Pension) (after Technical Corrections)
A SEP basically provides employer-sponsored Individual Retirement
Accounts (IRAs). The employer makes discretionary contributions
(from 0% to 25% of the employee's compensation) by contributing to IRAs
established for plan participants and owned by the participants.
Call a Summit Trust Advisor today at (877) 268-9115 to learn
more,
or click here to
open an
account with us today. |