Innovative retirement plan design can favor key employees
Business owners can implement creative retirement plan designs to ensure flexibility in allocations of employer contributions for staff. Nondiscrimination rules have traditionally prevented differentiation contributions for each staffer. However, the use of innovative plan designs can facilitate the distribution of greater company contributions to benefits for highly compensated employees or other important staff members. An innovative 401(k) Plan for the Millennium Plan is recommended as a qualified retirement plan for devoting a higher percentage of contributions to owner-employees, other principal employees or employees who appreciate the deferred compensation element of retirement plans. This proposed plan combines age-weighting and cross-testing concepts while satisfying statutory restrictions.
Publication Name: Practical Tax Strategies
The age-weighted profit sharing plan
IRS regulations proposed on May 10, 1990 and issued on Sep 12, 1991 open the door to a new concept in profit-sharing plans weighted by age instead of simply based on compensation. The new regulations determine whether a plan is discriminating in favor of highly-paid employees by projecting benefits to retirement. This means that more contributions can be allocated to older employees, even those who are highly paid, without the plan being considered discriminatory. Age-weighted profit sharing plans are expected to be popular.
Publication Name: Journal of the American Society of CLU & ChFC
The effect of "The Senior Citizens' Freedom to Work Act of 2000" on delayed retirement incentives
The authors estimate the probable effects of a law enacted in 2000 that sharply reduces the Social Security Act's retirement benefit penalties, imposed on working SS recipients aged 65 through 69 who earn more than $17,196 a year. Evidence that the law will postpone the age at which recipients stop work is analyzed.
Publication Name: Labor Law Journal
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