A profit sharing plan is a qualified retirement plan that allows companies to help their employees save for retirement. All contributions into this type of retirement plan are made by the company with no employee contributions allowed. Contributions from the company are typically discretionary, contributed on an annual basis to eligible employees and are tax deductible. The company can decide how much it will contribute from year to year, or even if it will contribute at all. The employer contributions in a profit-sharing plan are typically on a vesting schedule so if the employee leaves employment prior to becoming fully vested, the unvested portion of their retirement account can be used to pay retirement plan fees or for future plan contribution needs. Most employers are not aware there are different types of profit-sharing plans which determine how the employer contributions can be funded to employees. Also, a Profit-Sharing plan can now be set up for the preceding tax year as long as the plan document is established and signed before the company tax return filing date.

Please allow a PPC plan consultant the opportunity to explain the different profit-sharing plans and create a plan analysis for your specific company goal.