A Defined Benefit plan is a qualified pension plan which allows for certain tax benefits under the law, like tax-deferred investment growth and tax deductions based upon targeted annual contributions. Since all contributions into this type of plan are made by the sponsoring company, the tax deductions are taken by the entity sponsoring the plan. Defined benefit plans provide a fixed, pre-established benefit for employees and owners at retirement. Employees often value the fixed benefit provided by this type of plan. On the employer side, businesses can generally contribute (and therefore deduct) more each year than in 401(k) Profit Sharing plans. However, Defined Benefit plans are often more complex and, thus, more costly to establish and maintain than other types of retirement plans. There are different types of Defined Benefit plans which provide for different targeted contributions. Each type is based upon certain criteria: targeted amount of total annual contributions to be made; ages of employees both non-highly compensated and highly compensated and all owners. If an employer establishes a Defined Benefit plan, the plan sponsor:

• Can have other retirement plans in place during the same plan year (except SEP or SIMPLE)

• Can be a business of any size

• Will need to annually file a Form 5500 with a Schedule SB

• Must have an enrolled actuary to determine the funding levels and sign the Schedule SB

• Can adopt a DB Plan for the preceding tax year if done so by the company tax return filing date

At PPC we employee 7 actuaries as well as credentialed plan administrators that can assist with any type of Defined Benefit plan structure. We specialize in targeting contributions based on plan goals. Please allow our experts at Pension Planning the opportunity to help you design a retirement plan structure to accomplish your retirement plan needs.