Defined Benefit Plans

Get the right advantages for the right employees with our cutting-edge, hybrid plans

DB Plan Overview

  • Promises a specific monthly (or possibly lump sum) benefit, instead of accumulating contributions and earnings like a DCP
  • Employer must contribute enough funds to pay the promised benefits, regardless of profits and earnings
  • May be right for employers who want to shelter more than the annual defined contribution limit
  • Benefits usually based on employee compensation and years of service; may be affected by Social Security benefits
  • Maximum benefit allowable based on compensation averages and annual limits
  • Actuary determines yearly employer contributions using several variables
  • Non-vested accrued benefits forfeited by terminating employees can reduce employer contributions

See our DB plans below and/or contact us for a personalized consultation!

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Our experts will help you choose the right DB plan for your retirement needs and business goals

  • Relatively new and exciting hybrid plans
  • Great fit for successful owners and executives approaching retirement
  • Best in circumstances in which there are older, highly compensated principals of an employer and, on average, a younger group of employees
  • Can substantially increase the annual maximum dollar amount allocated to an individual while substantially reducing the overall costs (compared to stand-alone DC/DB plans)
  • Tax-favored tool that allows for rapid accumulation of retirement plan assets
  • Can serve as a tax shelter for those who do not need additional retirement savings
  • Hybrid plan resembling a DC plan: employee’s benefit is expressed as a hypothetical account balance instead of monthly benefit
  • Employee's "account" receives an annual contribution credit, usually a percentage of compensation, and an interest credit based on a guaranteed fixed rate or some recognized index
  • Account balance is the sum of all contributions and interest credits
  • Offers the option of purchasing an annuity benefit, but most employees will take the cash balance and roll it over into an IRA
  • Contributions determined by the sum of the contribution credits for all employees, plus the amortization of the difference between the guaranteed interest credits and the actual investment earnings (or losses)
  • Employees can see their "accounts" grow, but are still protected against market fluctuations
  • More portable, as employees can usually roll it into an IRA when they terminate employment or retire

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