Broker Check
ABC Company

ABC Company

Case Study #1


Goal:

For a new Company, create a new retirement plan.

Background:

J&J was referred to ProEast via an existing client.  The Company was 6 months old, and was looking to establish a retirement plan.

Process:

Process:

Questions, questions, questions.  What is the purpose of the Plan?  Is it for the benefit of the owners, employees, or mixed?  Who w/b paying the various expenses associated with a Plan?  Were the owners willing to make contributions for the employees or was this for individual deferrals without Company contributions?  And if they were willing to contribute, how much of one were they actually willing to make?  Each year the IRS outlines limits of contributions to individual accounts – was the Owner/Sponsor intent to reach those limits, or just to have a vehicle for employees with limited contributions by the Company.

Results:

A Safe-Harbor 401k Profit Sharing Plan was established.  Acting on the advice of ProEast, the owners decided they would contribute 3% to all employee accounts.  Further, the Company would pay Advisor and base recordkeeping fees; each participant would pay for their own account.  While established, for the first few years, NO profit sharing contribution would be made, just matching contributions to all employees at the 3% level, regardless of active participation.  This would have a benefit when/if the PS component was activated.

Today:

Everyone is pleased with the plan.  The Owner/Sponsors are making maximum deferrals to their own accounts.  They along with all other employees receive 3% of their salary as an Employer Contribution to their retirement accounts.  They meet with their ProEast Advisor 2x annually, and the participants meet with the Advisor once each year.  They are considering adding the PS contribution next year.

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