Defined Benefit Plan
Why A Defined Benefit Plan?
At MGKS, we utilize our years of experience to provide low risk defined benefit plans. Our experts use tried and tested formulas to calculate the best plan for you. With factors such as length of employment, salary history and other employment metrics. We are able to identify the investment risk of each plan we administer.
Repay your employees with a fixed amount at retirement.
Our qualified benefit & pension plans are intended to provide the best calculated retirement benefits for you ahead of time. We assure you that your plan calculations prevent any funding shortfall. We want to ensure your company is alleviated from any cash obligations moving forward.
Employees receive a fixed amount during retirement.
Organizations leverage this plan to retain high quality talent as it is desirable to employees.
Employers can deduct and contribute substantially more than a normal defined contribution plan.
Pay lower management costs and yield higher returns than most other plans.
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Single Life Annuity
Employees can select to receive payment for themselves on a fixed monthly basis for retirement.
Joint and Survivor Annuity
Get fixed monthly payouts. In the event of a deceased employee the payout goes to their beneficiary.
Lump Sum Payment
Employees can choose to take out all of the funds in a single payout.
Defined Benefit FAQs
What is the maximum contribution I can make under a Defined Benefit Plan?
The maximum contribution is based on several actuarial calculations. The maximum contribution is not the same amount for each participant. It depends on several factors such as age and salary history. As an example; a 50-year-old could make a contribution of up to $185,000 and potentially more depending on salary history. We can offer a free determination of the amount you can potentially contribute.
Many small plans have a current contribution budget, so the pension benefit is “backed into” based on the contribution budget.
Can contribution amounts change each year and are they required?
Contributions under a defined benefit plan are generally required. There are exceptions for plans that are over funded or have chosen to temporarily “limit” ongoing benefits. It is important to work closely with your TPA in order to monitor and control annual contributions
When can I withdraw money from the plan?
A distributable event is the typical justification for distribution. Distributable events include: attainment of normal retirement age, termination, death, disability or plan termination.
What type of investments are allowed under a Defined Benefit Plan?
Generally, most arm’s-length third party investments available to you on a personal level are also available for plan investments. Although some illiquid assets, like art or real estate, may require appraisals annually, the allowability for different types of investments in this area is pretty broad.