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Qualified Plan Includes PRIME- Pre-tax Healthcare Retirement Funding
Qualified Plan Includes PRIME- Pre-tax Healthcare Retirement Funding
Qualified Plan Includes PRIME- Pre-tax Healthcare Retirement Funding
Qualified Plan Includes PRIME- Pre-tax Healthcare Retirement Funding
Qualified Plan Includes PRIME- Pre-tax Healthcare Retirement Funding
Qualified Plan Includes PRIME- Pre-tax Healthcare Retirement Funding
Qualified Plan Includes PRIME- Pre-tax Healthcare Retirement Funding
Qualified Plan Includes PRIME- Pre-tax Healthcare Retirement Funding
Qualified Plan Includes PRIME- Pre-tax Healthcare Retirement Funding
Qualified Plan Includes PRIME- Pre-tax Healthcare Retirement Funding
Qualified Plan Includes PRIME- Pre-tax Healthcare Retirement Funding
Qualified Plan Includes PRIME- Pre-tax Healthcare Retirement Funding
Qualified Plan Includes PRIME- Pre-tax Healthcare Retirement Funding
Qualified Plan Includes PRIME- Pre-tax Healthcare Retirement Funding
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Qualified Plan Includes PRIME- Pre-tax Healthcare Retirement Funding

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FINEX Wealth Management Inc. exclusive "Combined Qualified Pension Plan" designed to include IRC §401h “PRIME”: a separate pooled trust fund of a pension plan used exclusively for retiree health …

FINEX Wealth Management Inc. exclusive "Combined Qualified Pension Plan" designed to include IRC §401h “PRIME”: a separate pooled trust fund of a pension plan used exclusively for retiree health benefits. This unique plan consists of five (5) contribution components: 401(k), Profit Sharing, Cash Balance Defined Benefit, Aggregated “PRIME” Benefit, and Tax Reserve. The key to this design is combining plan attributes in a non-discriminatory manner, cross-testing, and satisfying the concurrent offset rules which allow business owner’s to create a targeted employees only plan.

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  • 1. COMBINED QUALIFIED PENSION PLANCONCURRENT OFFSET, AGGREGATED BENEFITS & POST RETIREMENTMEDICAL BENEFITS UNDER IRC §401(H)FINEX WEALTH MANAGEMENT, INC.An Independent Tegrit Group AffiliateBARRY M. FINESENIOR FINANCIAL ADVISORFINEX WEALTH MANAGEMENT, INC.1201 Broadway, Suite 803New York, NY 10001631.513.8822An Independent Advanced Financial Strategies, Inc. Group Affiliate*****
  • 2. Tax Planning Tipso If needed, double the otherwise maximum tax deduction for 2013o Excess loss carry back or carry forward.o IRC § 404(a)(6) allows a cash basis tax payer to set-up CombinedPlans and/or add-on plan, now in 2013, and double the otherwisemaximum contribution/tax deduction, as long as, the plan isfunded on a timely basis.COMBINED QUALIFIED PLANS
  • 3. THE PURPOSE OF THIS PRESENTATIONo TO FAMILIARIZE YOU WITH COMBINED PLANS AS AUTHORIZED BYTHE PENSION PROTECTION ACT (PPA) OF 2006o TO ASSIST YOU IN PLACING CLIENT ASSETS UNDER YOURMANAGEMENT.o TO GROW AND PROTECT CLIENT ASSETSo THE MAXIMUM TAX DEDUCTIBLE CONTRIBUTIONS ALLOWABLEFOR OWNERS WITH THE LOWEST POSSIBLE PLAN COST(S)o ALL OF THE CREDITOR PROTECTIONS AFFORDED QUALIFIEDPLANS UNDER FEDERAL LAW AND STATE LAWS i.e. 2005 BAPCPA**Bankruptcy Abuse Prevention and Consumer Protection Act of 2005TO GIVE YOU A COMPETITIVE ADVANTAGE
  • 4. THE “GOLDEN RULES”OF PLAN DESIGNTHERE ARE 3 MAIN “GOLDEN RULES” MEETS THE CLIENT’S OBJECTIVES MAKE SURE THE PLAN IS COST EFFECTIVE MAKE IT EASY TO UNDERSTANDWHAT IS THE BEST STARTING POINT FOR A PLANDESIGN?MAXIMIZE OWNER BENEFITS - MINIMIZE PLAN COSTS
  • 5. THE COMBINED QUALIFED PLANFIVE CONTRIBUTION COMPONENTS1. The 401(k) Plan2. The Profit Sharing Plan 25% of eligible compensation ($255,000 in 2013) 6% of eligible compensation (service entities <25 participants)3. The Pension Plan IRC § 412(e)(3), Traditional or Cash Balance4. The Aggregated Benefit IRC §401(h)/Life Ins.ALL CAN BE FUNDED 100%
  • 6. 2013 Estimated Maximum Contributions*Age 401k only 401k P/S Combined Qualified Plan60-65 $23,000 $56,500 $300,000 - $450,00055-59 $23,000 $56,500 $250,000 - $325,00050-54 $23,000 $56,500 $200,000 - $275,00045-49 $17,500 $51,000 $150,000 - $225,00040-44 $17,500 $51,000 $125,000 - $200,000* Inclusive of spousal benefits where applicableALL CAN BE FUNDED 100%
  • 7. * §1.401(a)(26)-5(a)(2); 401(a)(26) = Minimum Participation Requirements** the 40%/50 employee rule in 401(a)(26)CROSS TESTING, CONCURRENT OFFSETS & AGGREGATEDINCIDENTAL BENEFITSKeys to Max Contributions & Min Plan Costs The Key to the Combination Plan Designs is doing it in a non-discriminatory manner while satisfying IRC Sec 401(a)(26). Cross Testing one plan with another establishes that the benefits at retirementfrom both plans are essentially “equal in value” at the plan’s NRD. Satisfying the Concurrent Offset Rules* allows us to create a “targetedemployees only plan”. We can count participants for testing who are fullyoffset on a non-discriminatory basis.** Aggregated Incidental Benefits allow us to increase the maximum pensioncontribution up to 133% of the otherwise maximum contribution. The AIB is a$$$ benefit that can be individually allocated as a 401h benefit, a lifeinsurance benefit or a combination of the two at the discretion of theparticipant.
  • 8. * §1.401(a)(26)-5(a)(2); 401(a)(26) = Minimum Participation Requirements** the 40%/50 employee rule in 401(a)(26)CASH BALANCE PLAN FUNDAMENTALSo It looks like an old fashioned savings accounto Accounts are credited with:o Employer Annual Contribution Credit e.g. $1,000o Annual Interest Credit e.g. 5% = $50o The Retirement Value is a Lump Sum, the Cash Balance!o For Example, $1,000/ Year @ 5% over 40 years = $126,190o Benefits are more easily understood by the participanto Participant receives an annual statement that shows an accountbalanceo Costs are Understandable by the Plan Sponsor
  • 9. IRC § 401(h) FUNDS NOT USED FOR BENEFITS REVERT TO THE COMPANYWHAT IS IRC §401h “PRIME” orLIFE INSURANCE Aggregated Benefit ?• THE POST RETIREMENT INDIVIDUAL MEDICAL EXPENSE BENEFIT• PRIME BENEFITS ARE AUTHORIZED UNDER IRC §401(h) A 401(h) account is a separate fund, or account, of a pension plan to be used exclusivelyfor retiree health benefits. 401(h) benefits are tax deductible subject to Final Regs Sec.404(a)(3)(f)(2); fully taxdeferred and payouts are tax free under IRC Sec. 105 or 106. 401(h) tax deductible contributions, as allocated, are subject to the annual addition limitfor Key Employees and HCEs ($50,000 in 2013) 401(h) benefits vest at the NRD for employees who go on pay status;employee/participants leaving prior to NRD forfeit 100% of their benefit
  • 10. Concurrent Offset Method & Aggregated Benefits Utilized in ProformasAnnual Compliance Testing and Government Reporting Monitoring of Qualification requirements (§401). Contribution deductibility calculations (§404). Minimum Participation and Coverage testing (§410) Monitoring of Minimum Vesting Standards (§411). Monitor compliance with Definitions and Special Rules (§414) Annual addition of benefits and allocations testing (§415). Top heavy testing (§416). ADP/ACP testing (applicable to 401(k) plans). Preparation of DOL/IRS Form 5500 and related schedules. Preparation of Summary Annual Report for participants. Preparation of appropriate PBGC form (for defined benefit plans only).The GATEWAY CONTRIBUTION @ 7.5% DOES TRIPLE DUTY, it covers the: Profit Sharing Safe Harbor Top Heavy Safe Harbor The Gateway @ 7.5%
  • 11. Case StudyParticipant Information Proposed AllocationsName Age Salary 401(k) Deferrals Matching Allocation Profit Sharing Allocation Cash Balance Allocation Aggregated Benefit Total Allocations Employer % of Pay Life Insurance Face Amount49 $250,000 $17,000 $5,775 $27,225 $130,800 $42,500 $223,300 89.32% $1,666,66745 $200,000 $17,000 $5,775 $27,225 $107,700 $15,000 $172,700 86.35% $1,666,667Owner Totals: $450,000 $34,000 $11,550 $54,450 $238,500 $57,500 $396,000 72.34% $3,333,33359 $242,923 $22,500 $7,700 $12,146 $25,000 $7,500 $52,346 21.55% $109,77750 $230,791 $13,000 $4,550 $11,540 $0 $7,500 $23,590 10.22% $70,76266 $166,891 $22,500 $7,700 $13,345 $0 $7,500 $28,545 17.10% $0Executive Totals: $640,605 $58,000 $19,950 $37,030 $25,000 $22,500 $104,480 19.08% $180,53942 $63,011 $0 $0 $3,151 $0 $1,050 $4,201 6.67% $059 $65,526 $7,800 $2,730 $3,277 $0 $700 $6,707 10.24% $025 $29,483 $0 $0 $2,250 $0 $750 $3,000 10.18% $71,81652 $67,804 $3,900 $1,365 $3,391 $0 $700 $5,456 8.05% $032 $35,035 $0 $0 $2,250 $0 $950 $3,200 9.13% $58,66562 $109,629 $10,250 $3,588 $5,483 $0 $700 $9,770 8.91% $045 $54,043 $0 $0 $2,703 $0 $1,200 $3,903 7.22% $054 $71,892 $7,800 $2,730 $3,595 $0 $700 $7,025 9.77% $053 $60,000 $0 $0 $3,001 $0 $700 $3,701 6.17% $0Staff Totals: $556,424 $29,750 $10,413 $29,100 $0 $7,450 $46,963 8.58% $130,481Grand Totals: $1,647,029 $121,750 $41,913 $120,581 $263,500 $87,450 $547,443 100.00% $3,644,353* Total Allocations for Staff only inlcudes Employer Allocations (does not include 401(k) Deferrals)2012 Retirement Analysis 10.31.12 PYEAge Salary 401(k) Deferrals** Matching Allocation Profit Sharing Allocation Cash Balance Allocation Aggregated Benefit* Total Allocations49 $250,000 $17,000 $5,775 $27,225 $130,800 $42,500 $223,30045 $200,000 $17,000 $5,775 $27,225 $107,700 $15,000 $172,700Owner Totals: $450,000 $34,000 $11,550 $54,450 $238,500 $57,500 $396,000Double-up** $0 $11,550 $54,450 $238,500 $57,500 $362,000Double- up Totals: $34,000 $23,100 $108,900 $477,000 $115,000 $758,00071.45%Executive Double-up Totals $0 $39,900 $74,060 $50,000 $45,000 $208,96019.70%Staff Double-up Totals: $0 $20,826 $58,200 $0 $14,900 $93,9268.85%$34,000 deductible on calendar year basis *Policy date 9.1.12
  • 12. 2012 Deductions Still Available Through Tax File Extensions OnlyWHO SHOULD CONSIDER Immediate 2013 Tax BenefitsA COMBINED QUALIFIED PLAN DESIGN Owners/professionals seeking a higher contribution/tax deduction thanthe traditional 401k profit sharing maximum of $50,000 ($55,500 withCatch-up). Highly profitable companies of all types and sizes. Successful family businesses and closely-held businesses. CPA and law firms, medical groups and professional firms. Older owners who need to squeeze 20 years of retirement saving into 5 to10 years. Owners/partners looking for a way to fund a buy-sell or stock redemptionagreement on a tax deductible basis. Wealthy owners and professionals with charitable giving intentionsstymied by the limitations on tax deductibility.
  • 13. 2012 Deductions Still Available Through Tax File Extensions OnlyABOUT FINEX WEALTH MANAGEMENT, INC.o FWM is an independent, national, fee based third party administratorproviding consulting, design and administrative services to plan sponsors andtheir advisors across the United States.o FWM partners with RIA’s, Agencies, Independent Advisors and sells anyform of investment or insurance product and renders investment advice.o FWM members have over 40 years of experience in financial services, planbenefits and administrative services.o FWM plan designs are actuarially certified and come with IRS favorable letterof determination.o FWM provides comprehensive legal documentation, trust accounting,recordkeeping, benefit statements, plan reporting and governmental filings.o FWM is an independent Tegrit Group affiliate; Tegrit has been awarded theCEFEX certification for adhering to the American Society of PensionProfessionals & Actuaries (ASPPA) Standard of Practice.
  • 14. PLAN DESIGN AND PROPOSALSAVAILABLE UPON RECEIPT OF CENSUSBARRY M. FINESENIOR FINANCIAL ADVISORFINEX WEALTH MANAGEMENT, INC.1201 Broadway, Suite 803New York, NY 10001631.513.8822An Independent Advanced Financial Strategies, Inc. Group Affiliate*****

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