E.H. Thomson & Company, Cash Balance Pension Plan Consultant
Under the cash balance pension plan, an employer contributes a set percentage of the participant employee’s yearly compensation plus interest credits in their individual accounts. Most people are comfortable with the amount they are contributing to their 401(k) plans. They don’t worry about exceeding the annual contribution limit. However, if you are looking to contribute significantly more to your pension account, then the cash balance retirement plan is the right choice for you.
At E.H. Thomson & Company, our pension planning consultants will understand your future goals and design a pension program that best suits your needs. Contact our support team and our consultant will guide you and help achieve your long-term targets.
Why Choose a Cash Balance Pension Plan?
- Better tax deductions
- The amount contributed by the company is tax-deductible now
- The beneficiaries don’t have to pay taxes on the amount until it is received as income
- For both owners and key employees, it is an accelerated retirement savings plan
- The liability of employers is easily defined
How Does a Cash Balance Retirement Plan Work?
When every participant contributes, their investment grows every year in two ways. First, the annual contribution, and second, the interest credit, that is guaranteed at the time of retiring (irrespective of the plan’s investment performance). Our experienced consultants can design plans that allow employers to offer a combination of qualified retirement plans to produce a larger contribution. Under this plan, if the employee is retiring or decides to leave the job, he/she is entitled to distribution options. Any vested account can either be paid as a lump-sum distribution (usually rolled over to an IRA) or annuity.
Although the design and administrative costs of cash balance defined benefit plans are a little higher than the typical 401(k) profit-sharing plans, we still offer the best rates and service in the market. Get in touch with us to know which plan is the right choice for you.