Resources

rss

Spectrum Resource Center

Advice, Articles, Events, Insights, News, Newsletters, Opinions, Press Releases, Updates, and More from Spectrum.

defined-benefit-plans-are-alive-and-well-image

Defined Benefit Plans are Alive and Well

Defined Benefit Plans are Alive and Well

For the most part, the news about Defined Benefit plans lately has not been particularly good. Whether a big company could no longer fund its plan or how it was bankrupting their business, headlines have discouraged many businesses from seriously considering a DB plan.

But we believe it's time to take another look. For smaller, more mature companies, a DB plan can be a great vehicle to help you and your employees prepare for retirement. With a Defined Contribution plan, it's your employees who make many of the contributions and take on the investment risk. Their retirement benefit is their accumulated balance. With a Defined Benefit plan, you, as the plan sponsor, makes the contributions and assumes the risk. Your employees receive a promised benefit at retirement, typically in the form of monthly income.

A DB plan isn't for everyone, but you may find that type of plan may help you meet your tax and savings goals. For example, if you've been focused on building your company but have pushed off saving for retirement, a DB plan can be a tool to help you make up for lost time with substantial contributions. It may even help you retire early if that's something you're considering.

You can also use a DB plan as an incentive to attract new talent. While a 401(k) plan allows employees to contribute to their retirement savings, a DB plan is your responsibility to fund. This can present a competitive advantage if you're needing to recruit and retain top talent.

But only businesses that have predictable earnings and long-term viability should consider a Defined Benefit plan because there are consequences if required contributions are missed.

If a Defined Benefit plan sounds like it might solve some of your retirement and tax planning issues, let's talk and determine if it's a good fit for you and your business.


blog comments powered by Disqus

Tags

401k loan participant loan investing margin professional plan design practice defined benefit pension fees dol retirement readiness documents compliance spectrum open golf pano cancer event tournament philanthropy fiduciary rule tax cuts press release bi cloud technology azure plan intelligence docusign microsoft myretirement limits irs retirement plan contribution asset allocation investments newsletter cybersecurity plan termination merger acquisition gender retirement gap lifetime income investment returns women men erisa defined contribution financial wellness employees financial stress plan faq participant questions payroll finwell plan education fis impact award technology innovation education entreprenuers business accumulation startup wealth ira charity millennials 40th anniversary celebration soc-1 automation recordkeeping case study portal fiduciary tax deduction enrollment escalation video automatic qdia qualified default investment alternative roth participant outcomes uncashed checks distributions debt credit saving cash balance cbpp safe harbor nondiscrimination adp acp top-heavy plan sponsor 3(16) hardship withdrawal forfeiture forfeit vested vesting owner audit bond bundled unbundled psoy plan sponsor of the year abg mfa consulting employer connect reports student loans db/dc providers services guide erisawrap welfare benefit plan fundraiser document cancer reserach retirement confidence wrap spd wrap document plan document welfare benefits employee benefits healthcare wrap unvested vested account balance

Newsletter

Keep up on our evolving products, services, solutions, and technology through our Newsletters.

About Our Firm

Spectrum Consultants is a multidisciplinary B2B consulting firm, which specializes in 401k administration, benefit plan outsourcing, business solutions, and management consulting.

Get in touch

  • Address: 6402 19th Street, Tacoma, WA 98466, USA

  • Phone: +1 (253) 565-2100

  • Email: Contact Us Form