|
Answering Your Pension
Questions
|
|
| When Do I Need To Establish A Retirement Plan? |
| A Micro(k) plan must be installed in writing and communicated to each eligible participant PRIOR to the end of the tax or fiscal year of the employer. This P & Q is designed to give you and your client the general rules that must be followed in order to have a valid (and tax deductible) retirement plan. |
| Document
#: 0011038XX 05/2007 |
|
|
|
|
| Can I Sponsor More than One Retirement Plan? |
| The Pension Protection Act '06 favorably changed the deduction rules when an employer sponsors multiple plans. Generally, the Act allows a sponsor to fully deduct BOTH a defined benefit plan and a defined contribution plan as long as the latter does not exceed 6% of the payroll. Employee salary deferrals may also be added above this employer limit. This P&Q provides a detailed analysis of this important issue. |
| Document
#: 0011037xx 10/2006 |
|
|
|
|
| How Much Life Insurance Can I Buy In My Retirement Plan? |
| One compelling advantage of a Micro(k) over a SEP-IRA is that life insurance may be made a permitted investment of the Trust as long as the Trust is the owner and beneficiary. Of course, the death benefits will then be paid according to the beneficiary form on file with the plan administrator. However, life insurance must be kept incidental to the plan. This P & Q summarizes the life insurance incidental rules contained within SAI's prototype and custom documents. |
| Document
#: 0011039XX 01/2008 |
|
|
|
|
| What Tax Issues Must I Understand Regarding Life Insurance in Retirement Plans? |
| Adding life insurance to a retirement plan is a time-honored strategy for a Plan to provide enhanced survivor benefits on a tax-favored basis. However, before a "qualified" life insurance policy is considered, you should first be familiar with some general compliance and tax issues presented in this brochure. |
| Document
#: 0011085XX 01/2008 |
|
|
|
|
| Should I Get an Employer Identification Number from the IRS? |
| If your current business entity type is a C-Corporation or an S-Corporation, you probably already have an Employer Identification Number (EIN). Oftentimes however, Sole Proprietors and one-person Limited Liability Companies use only their Social Security Number on relevant Tax Forms and do not have a separate EIN. If you do not currently have an EIN for your business entity, one must be applied for and received from the IRS if you intend to sponsor a Qualified Retirement Plan. |
| Document
#: 0011197XX 06/2007 |
|
|
|
|
| I am Self Employed. What is My Income for Qualified Plan Purposes? |
| Self-employed persons do not have W2 wages. Rather, earned income (income subject to FICA and FUTA taxes) is the measure of salary. Calculating earned income is complex and is impacted directly by the retirement plan contribution. This P & Q sheds some light on this important topic. |
| Document
#: 0011198xx 06/2007 |
|
|
|
|
| How is My 401(k) Plan's Mutual Fund Platform Priced? |
| A mutual fund is an investment company that continuously offers new equity shares in an actively managed portfolio of securities. All shareholders participate in the fund's gains or losses. The shares are redeemable on any business day at the net asset value. Each mutual fund's portfolio is invested to satisfy the objective as stated in the fund's prospectus. In addition, the prospectus describes the pricing of the fund and the risks of investing in the fund. A mutual fund may have several different share classes reflecting different cost structures, and each of these must also be identified in the fund's prospectus. |
| Document
#: 0011199XX Rev. 06/2007 |
|
|
|
|
| How is My 401(k) Plan's Group Variable Annuity Priced? |
| An annuity is an insurance company product designed to provide supplemental retirement income, in the form of a guaranteed stream of payments beginning at a specified time and lasting for a specified period. Payments to an annuity experience gains and losses during the Accumulation Phase, and are liquidated, or annualized, during the Annuity Phase. Insurance companies offer Fixed Annuities and Variable Annuities on both an individual and a group basis |
| Document
#: 0011201XX 06-2007 |
|
|
|
