Defined Benefit Plans, Cash Balance Plans, 412(i) Plans
Available from Madison Pension Services, Inc.
We believe that our experience with small, mid-sized, and large companies is without rival. This is evident in the number of plans that we handle, as well as the importance and complexity of these plans.
A DEFINED BENEFIT PLAN promises to pay a specified benefit at future retirement to eligible participants, in contrast to a defined contribution plan that allocates a specified contribution to its participants’ accounts at a present time.
A CASH BALANCE PLAN is a type of defined benefit plan that contains hypothetical account balances communicated to participants. A participant will earn what is called a contribution credit (usually a fixed percentage of compensation or a fixed dollar amount) for each year of service he/she is credited with.
A 412(i) PLAN, formerly defined under IRC412(i), may offer a good alternative to the traditional defined benefit plan for small employers with very few, if any, rank & file employees, who want to maximize tax deductible contributions. Such a plan is funded exclusively with annuity contracts, and possible with life insurance policies, issued by a common life insurance carrier.