World-Class Retirement Solutions for your Business
Retirement Plan Consultation
Schedule a free consultation to discuss the different plan design options available. From the sole proprietor to the large corporation, we can help develop a retirement package tailored to the specific needs of your business.
The Best Retirement Plan Administration
MGKS provides businesses of all sizes the best possible retirement solutions available. Our mission is to approach every client as a unique engagement and to customize retirement plans to the specific needs of each plan sponsor. The MGKS team consists of a premier staff of actuaries, accountants, consultants, and administrators who are dedicated to the highest standards of our profession. We are dedicated to making sure your plans are designed properly and operating as efficiently as possible. A well designed retirement plan is crucial to helping you prepare for retirement and is a tool that helps your business attract and retain employees.
Most employees are hesitant to work for a company that does not offer any type of retirement program. Giving your staff a vehicle to save for retirement is important and, in some cases required, to stay competitive in your industry. The traditional 401(k) plan is the perfect example of how to add value to your employees and there are specific plan designs that minimize the out of pocket costs to business owners. In a 401(k) plan, employees and business owners can elect to defer a portion of their own salary on a voluntary pre-tax or roth basis, and in some cases the plan sponsor agrees to match those deposits, which increases participation and improves testing. Sponsoring a 401(k) plan helps your employees take an active role in saving for their own retirement and alleviates financial uncertainty, which ultimately leads to a more productive employee
Click here for current 401(k) contribution limits.
Business owners and highly compensated employees who have large tax liabilities and want to shelter more than the annual defined contribution limits allow ($56,000 in 2019 and $57,000 in 2020) may want to consider a defined benefit plan, as the contributions can be substantially higher, resulting in the fast accumulation of retirement funds and possibly the largest tax deduction you will ever receive.
Cash balance plans are quickly replacing defined benefit plans as they are easier to understand. These plans offer the same funding potential as a traditional defined benefit plan but also operate with the veneer of a 401(k) Profit Sharing Plan and are often referred to as a hybrid plan. Each participant will have a hypothetical account balance which grows at a stated interest rate every year. When distributions are processed, due to separation of employment or retirement, the participant will receive their vested account balance, rather than trying to interpret the complex actuarial math required in a traditional Defined Benefit Plan.
Combination plans are very popular as they offer large tax deductions and savings opportunities similar to other retirement plans but can be designed to skew benefits in favor of the owners or key employees. These plans are designed to maximize contributions to the owners in the DB/CB plan while providing minimal benefits for the rank and file participants to the extent required by law. Given these benefits are disproportionate in comparison, we then use the 401(k) profit sharing plan as an alternative to provide employer funded profit sharing dollars to rank and file participants until the discrimination tests required by the IRS have been satisfied. A typical plan design would require a total of 7.5% of pay to your rank and file participants while the owners may receive 80% or more of the total contribution for the year, depending on the demographics of your employees. Each combination plan is highly customized on a case by case basis and they offer the best possible tax deduction vehicle and wealth building strategy for those that need to fund heavily.
ESOPs are company sponsored. Funding occurs when the sponsoring company makes contributions to an ESOP trust. Contributions can be in the form of employer stock or cash. In a leveraged ESOP, the plan can borrow money to buy shares which are held within a suspense account in the ESOP. Cash contributions to the ESOP are used to repay the loan and take a tax deduction. Since the loan is repaid through a contribution to the plan, both the principal and interest are deductible. Generally, the deduction is limited to 25% of eligible compensation. Shares are released as the loan is paid and are allocated to participant accounts. An annual valuation must be performed for an independent outside appraiser. The resulting share price is used to value the shares in participant accounts. A vesting schedule may apply for up to a six year period.
Know Your Options
A Retirement Plan can serve many purposes, from sheltering taxable income to attracting and retaining employees.
401(k) Profit Sharing Plans
Defined Benefit Plans
Cash Balance Plans
Qualified 3rd Party Administrators (TPA)
Enrolled Actuaries (EA)
Having an actuary in-house is pivotal to any third party administration firm servicing Defined Benefit Plans and Cash Balance Plans. These plans have annual tax filings that must be certified annually by an actuary, much like a CPA certifies certain personal and company tax returns. Since actuarial mathematics are highly technical and not easily understood, it’s challenging to be able to convert the legal jargon and complex mathematics in a manner that makes sense to the average person. Here at MGKS our actuaries do exactly that and are happy to help our clients understand these actuarial principles and concepts.
Certified Pension Consultant (CPC)
Often regarded as one of the highest non-actuarial certifications one can attain in our industry, our certified pension consultants have demonstrated their expertise in both 401(k) plans and Defined Benefit plans. Those who have earned the CPC credential, have a broader scope of knowledge about the various retirement plans available and their experience in the industry (a minimum of 3 years is required) will assure you that they are both qualified and eager to help service your business.
Accredited Pension Administrator (APA)
The accredited pension administrators on our staff have taken the next level in their career by increasing their competency levels in the scope of plan administration. As with the other designations offered from by American Society of Pension Professionals and Actuaries (including the QKA and CPC), this designation, offered by the National Institute of Pension Administrators, is challenging and hard to attain. Those that have made the commitment to study and pass the multiple examinations required for this designation have proven they are dedicated to this industry and have the technical background and knowledge needed to service your retirement plan.
Qualified Pension Administrator (QPA)
Similar to the QKA is the QPA. Our Qualified Pension Administrators have taken their knowledge of administering 401(k) plans and added to it the necessary knowledge and skills for administering Defined Benefit plans. The QPAs of MGKS have had exposure to all the elements in maintaining either a Defined Benefit or a 401(k) plan and have proven their expertise by passing the multiple exams required for this designation.
Qualified 401(k) Administrator (QKA)
The administrators at our firm that possess the QKA credential are those who have taken the time to learn and study the nuances of the 401(k) retirement plans. Through a series of exams, they’ve proven they know the ins and outs of what it takes to truly administer all of the components that come along with maintaining 401(k) plans including nondiscrimination and compliance testing, determining eligibility, certain record keeping components, and more.
Enrolled Retirement Plan Agents (ERPA)
This designation, offered by the IRS, is awarded to individuals who have demonstrated competency in a number of subjects relating to retirement plans. Those who have studied to attain this credential have earned the right to act in a limited power of attorney role; meaning, should you need to contact the IRS regarding certain plan matters, our ERPAs can run point and be the liaison between you and the IRS.
Our Clients Stay With Us.
“Over and above expected competence, one of the key characteristics we have come to appreciate from our 30 plus years of work with the professionals at MGKS is integrity. In our world as a fiduciary level investment adviser, maintaining a professional network of firms with integrity is critical.”
– Stephen J. Taddie
“In the world of retirement plan administrators, MGKS is hard to beat. They continually prove their value to both my clients and my firm every day”
– Shawn West AIF, CPFA
“I’ve used MGKS for decades to design and administer retirement plans for my clients. They are professional, efficient, and client friendly.”
– Jim Van Houten, CLU, CFP