ManagedPlan - Plan Types Offered

AdvisorPlan

PCSCapital

Professional Capital Services offers expert plan administration and state-of-the-art technology to provide the highest-quality support in all aspects of plan administration and recordkeeping. The following is a list of the plan types that can be administered on the ManagedPlan platform. For more information on each plan type, please click on the link below: 401(k)/Profit Sharing Plan Employees can defer a portion of their salary directly into the Plan, tax-free or after- tax (Roth) Employees can contribute up to $15,000 in 2006 on a pre-tax or after-tax (Roth) basis Catch-up contributions, up to $5,000, are allowed for employees age 50 and over Employers may elect to match employee contributions Employers may also elect to add a profit sharing contribution for additional tax savings Any investment gains and earnings also enjoy tax deferral until distribution. Because Roth contributions are after-tax, assets grow tax-free. Advantages Employers can substantially increase contributions for older workers (typically the business owner and other key employees) Employers can minimize the total cost of the company's contributions on behalf of its other young or frequently non-owner employees Disadvantages Plan parameters may be difficult to convey to employees Advantages are limited by relative disparity in employee ages New Comparability Formula A non-elective or profit sharing allocation formula allowing contributions to be structured to maximize the benefits for owners and/or key employees The formula allows separate groups of employees based on job description, salary, service, or even by name and allocates different rates/contributions to each group The amount which can be contributed for the highly compensated employees is limited by IRS regulations (general non-discrimination rules) which convert contributions to future benefits Advantages Employers can substantially increase contributions for certain employees (typically the business owner and other key employees) Employers can minimize the total cost of the company's contributions on behalf of its other young or frequently non-owner employees Employers can vary the amount to be contributed for each group without amending the plan Disadvantages Plan parameters may be difficult to communicate to employees Advantages may be limited based on employee ages Safe-Harbor Contribution Formula Employer contributes a safe harbor matching contribution (100% of the first 3% of compensation, plus 50% of the next 2% of compensation) or safe harbor non-elective contribution (equal to 3% of compensation) Safe harbor contributions are 100% vested when made Requires notice to employees of intent to use the Safe Harbor rules Advantages Robust program that features both employer and employee contributions Nondiscrimination tests for elective deferrals and matching contributions are eliminated Excellent tool for attracting and retaining employees For top heavy plans, safe harbor contribution (matching or non-elective) satisfies the minimum required contribution Disadvantages Safe harbor contributions are 100% vested immediately While it is possible to suspend contributions after the safe harbor notice is issued, it will likely result in employee dissatisfaction Uncertain and potentially costly contribution obligation for safe harbor matching obligation ERISA 403(b) Accounts Employees can defer a portion of their salary directly into the Plan, tax-free or after- tax (Roth) Employees can contribute up to $15,000 in 2006 on a pre-tax or after-tax (Roth) basis Catch-up contributions, up to $5,000, are allowed for employees age 50 and over Employers may elect to match employee contributions Employers may also elect to add a profit sharing contribution for additional tax savings Any investment gains and earnings also enjoy tax deferral until distribution. Because Roth contributions are after-tax, assets grow tax-free. Retirement vehicle for a non-governmental, tax-exempt 501(c)(3) organization, hospital, educational institution or church Employees can defer a portion of their salary directly into the Plan, tax-free or after- tax (Roth) Employees can contribute up to $15,000 in 2006 on a pre-tax or after-tax (Roth) basis Catch-up contributions, up to $5,000 are allowed for employees age 50 and over Employers may elect to match employee contributions Employers may also elect to add a profit sharing contribution for additional tax savings Two different types of catch-up contributions may be made by Employees Advantages Account holders contribute toward their own retirement savings Requires universal availability rather than non-discrimination testing for employee contributions Minimal Form 5500 reporting obligations Disadvantages For most participants, investment options limited to mutual funds or variable annuities ERISA’s requirements governing non-discrimination testing, documents and reporting and disclosure can present a significant administrative burden. ERISA’s fiduciary obligations require the employer and/or its representatives to act as a prudent expert with respect to the selection of plan investments Non-ERISA 403(b) Accounts Retirement vehicle for a tax-exempt 501(c)(3) organization, hospital, educational institution, church. Allows employees to defer up to $15,000 per year in 2006 Two different types of catch-up contributions may be made by Employees Advantages Account holders contribute toward their own retirement savings Requires universal availability rather than non-discrimination testing for employee contributions No Form 5500 reporting obligations Disadvantages For most participants, investment options limited to mutual funds or variable annuities Historically required little employer oversight (new IRS regulations are challenging this perception) 457(b) Retirement Plan “Eligible Plan” Exclusive deferral plan type for State or local government employees Available to tax exempt organizations as either an excess benefit plan or a top-hat plan (for select management employees) Allows employees to defer a portion of current compensation in exchange for retirement plan contributions, up to $15,000 per year in 2006 Allows immediate tax deferral on employee contributions and accumulated earnings May allow for employer matching contributions May allow for employer discretionary, non-elective contributions Advantages Employees contribute toward their own retirement savings Employees contribute on a pre-tax basis Additional “catch up” provision for participants within three years prior to retirement Governmental employees may rollover contributions to other tax favored programs – IRAs, etc. For employees of tax exempts, although technically a nonqualified plan, an Eligible Plan resembles a tax-qualified plan in that, as long as a plan meets the requirements of 457(b), employees are not taxed on their plan interests until they actually receive plan distributions or such amounts are made available to them Disadvantages Generally low participation levels The $15,000 (indexed) limit applies to all types of contributions (employer and employee) Plan assets remain subject to claims of the employers creditors until paid to employees 457(f) Retirement Plan “Ineligible Plan” Ineligible Plans are plans that do not meet the requirements of Code Section 457(b) and resemble, in some ways, the nonqualified plans of for-profit employers. Available to tax-exempt organizations as either an excess benefit plan or a top-hat plan Allows employees to defer up to 100% of current compensation Allows immediate tax deferral on employee contributions and accumulated earnings May allow for employer matching contributions May allow for employer discretionary, non-elective contributions Advantages Employees contribute toward their own retirement savings Employees contribute on a pre-tax basis No limits on deferral amounts Disadvantages Generally low participation levels Unlike participants in Eligible Plans, participants in Ineligible Plans are taxed on their elective deferrals and any employer contributions when those amounts become vested Subject to the claims of the employer’s creditors until paid to employee Subject to income tax when not subject to a substancial risk of forfeiture Next		Meeting the Needs of Broker Dealers • Services for Broker Dealers Meeting the Needs of Plan Advisors • Services for Financial Advisors Meeting the Needs of Plan Sponsors • Services for Plan Sponsors • Services for Plan Participants • Fiduciary Services Plan Types Offered

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