Cash Balance Plans

Many times, an owner in a 401(k)/ Profit Sharing Plan wants to contribute more money than the $53,000 or $59,000 (with Catch Up) defined contribution limits allow.

For 2017, the maximum contributions are:    

Salary Deferral $18,000
Catch up (50+)      6,000
Profit Sharing     29,000
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Total Contribution $53,000

Using the illustration below, compare the Combination Cash Balance/ 401(k) Profit Sharing Plan to the New Comparability Plan. Notice that the contribution for each owner increased from $52,000 to $143,000, yet the cost for the NHCEs is still minimal at $15,693.

For a more detailed discussion of Cash Balance Plans, go to the U.S. Department of Labor web site where you will find FAQs about Cash Balance Plans

http://www.dol.gov/ebsa/faqs/faq_consumer_cashbalanceplans.html

Compare the following Combination Cash Balance/401(k) Profit Sharing Plan to the New Comparability plan. Notice that the contribution for each owner has increased to $143,000 from $59,000, yet the cost of the NHCEs is still minimal at $15,693.

Sample Combination Cash Balance / 401(k) Profit Sharing Plan

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