401(k) Plans

401(k) plans are one of the most popular types of retirement plans. A 401(k) plan enables employees to make tax-deductible contributions in the most tax-efficient manner possible. Moreover, if the plan so provides, the employer may make matching contributions to encourage participation or to satisfy nondiscrimination requirements.

Danziger & Markhoff LLP's third party administration department provides advice to its clients in designing the type of 401(k) plan that best meets the clients' needs. In many instances the attorneys, actuaries and plan administrators of the firm will suggest that a client add a 401(k) to its existing retirement plan program, since the implementation of such a plan may benefit the business owner by providing an additional employee benefit and/or reducing the required contributions to be made on behalf of the staff.

Should the client adopt a 401(k) plan with a "Safe Harbor" feature? Should the client offer a matching contribution? Does a Roth 401(k) provision make sense? These are some of the typical questions we will answer when developing the proper 401(k) plan design for our clients.

Danziger & Markhoff LLP prepares the annual nondiscrimination tests required for 401(k) plans (ADP test and ACP tests). In addition, we analyze the test results and make recommendations, when appropriate, to facilitate compliance with IRS nondiscrimination requirements. Our office also works closely with the plan's investment platforms to make sure that our clients' records are being properly maintained, and serves as a resource to answer questions and resolve issues that may arise in the day-to-day processing of plan transactions.

Profit-Sharing Plans

Profit-sharing plans are also one of the most popular plans sponsored by our clients. Contributions to profit-sharing plans are discretionary and are typically a percentage of each employee's compensation.

Our office has extensive experience in designing and administering a specialized type of profit-sharing plan called a "New Comparability" profit-sharing plan. Depending on employee demographics, and the goals of the owner of a business, these plans may enable a larger percentage of the plan contributions to be allocated to the owners of the business while allocating a smaller percentage of the contribution to the staff. Our actuarial staff is experienced in performing the annual IRS-mandated tests and calculations to ensure compliance with all IRS requirements. Our office has extensive experience in designing New Comparability profit-sharing plans to meet the needs of our clients, such as increasing plan flexibility to provide contributions to specific classes of employees, providing the owners of a multi-owner business with disparate contributions to the plan, etc.

Defined Benefit Plans

The firm's team of actuaries and plan administrators regularly provide design and actuarial services for the implementation and administration of defined benefit plans for our clients.

Clients will typically consider a defined benefit plan when the business owner desires to make contributions to a retirement program which exceed the statutory defined contributions limits. For example, the defined benefit contribution for a business owner may exceed $150,000 depending upon age and income. If a 401(k) plan with a profit-sharing feature is implemented in addition to the defined benefit plan, an additional contribution of as much as $34,000 may result.

Cash Balance Plans

Cash Balance plans, which are a type of defined benefit plan, have become popular with our clients who desire to receive contributions above and beyond contributions permitted under profit-sharing plans. Cash balance plans also provide the benefit of simplicity (as compared to traditional defined benefit plans), enabling the business owner and the employee to more easily understand the benefits being provided. Another benefit is the ability to target specific dollar contribution amounts to different partners in a partnership or to different owners of a business. Many of the firm's clients have implemented cash balance plans for these reasons and our firm has extensive experience in designing, preparing and administering these types of plans.

403(b) Plans

A 403(b) plan is a type of defined contribution plan available only to employees of Code Section 501(c)(3) organizations (including educational and charitable organizations). Similar to a 401(k) plan, employees may make tax-deductible contributions and the plan may also provide for an employer match.

Our firm's services include plan design and implementation, as well as preparation of participant statements, and annual governmental filings for 403(b) plans.

Plan Design

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