Pension Plans for Special Situations
In a Defined Benefit Pension Plan the amount of an individual’s benefit at retirement is known.  Based on certain assumptions, plus changes in employee earnings and the plan’s investment return, the employer makes annual mandatory, actuarially determined contributions to fund the benefit at retirement.

Defined Benefit Pension Plans, also known as “traditional pension plans” allow some employers to contribute substantially large amounts each year, whereas profit sharing and other types of plans have a maximum contribution per individual of $61,000 in 2022 and $66,000 in 2023. These plans can be a very powerful method of accumulating retirement funds in a relatively short amount of time.

Money Purchase Pension Plans have become generally obsolete. They have the same contribution limits as profit sharing plans ($61,000 in 2022 and $66,000 in 2023) but none of their flexibility as a contribution percentage is mandated by the plan document. Please call for more details…