Stonegate Wealth Management LLC has recognized the need for a high quality, low cost retirement plan alternative. For too long retirement plans have had the wool pulled over their eyes in regard to fees. Far too many plans, especially group variable annuity products, have “hidden fees” which can drastically affect investment performance over time. We know nobody can control the stock market but we can control the fees.
In a series of recent initiatives we have leveraged our long standing relationship with Charles Schwab to build just this quality, low cost product. Our fees will be fully disclosed and in writing.
Stonegate designs and manages a wide range of Retirement plans as part of your company benefits package, including:
Stonegate custom designs your company retirement plan to work for you. We study your entire operation beyond the tax and funding aspects to integrate the plan with your everyday business and personal activities. Whether you are a small business needing a simple standardized plan or a public corporation with more complex benefits and pension needs, Stonegate offers solutions for your situation and has the capability to handle all phases of the plan:
Profit Sharing Plans - A profit sharing plan is a defined contribution plan to which the company agrees to make “substantial and recurring,” though generally discretionary contributions. The employer may contribute and deduct up to 25% of eligible compensation. Amounts contributed to the plan are invested and accumulate (tax-deferred) for eventual distribution to participants or their beneficiaries either at retirement, after a fixed number of years, or upon the occurrence of a triggering event (death, disability, or termination of employment).
New Comparability Profit Sharing Plan – A new comparability plan is a new type of profit sharing plan which may allow substantial contributions for a favored and, on average, older group, with much lower contributions for the other employees. The allocations to the other employees must be the lesser or 5% of pay or 1/3 of the highest percentage allocated to a highly compensated employee.
Integrated Profit Sharing Plan – Allocations in an integrated profit sharing plan are determined by the social security wage base, therefore allowing participants with compensation in excess of this limit to receive a higher percentage of the contribution.
Age-Based Profit Sharing Plan – An age based profit sharing plan is a profit sharing plan that uses both age and compensation as a basis for allocating employer contributions among plan participants. Because age is a factor, this type of plan favors older employees who have fewer years than younger employees to accumulate sufficient funds for retirement.
401(k) Plan – 401(k) plans are a feature of profit sharing plans that offer participants an election to defer income from their pay and contribute that amount to a separate account for their retirement benefit. The employee always “owns” or is 100% vested in the amounts contributed from their pay. Employers may match the employee contributions on a dollar or percentage basis. 401(k) contributions are considered separately for percentage calculations in profit sharing plans, permitting the employee contribution not to be counted against the 25% limitation.
Roth 401(k) Plan – Beginning in 2006, 401(k) plans will be permitted to allow employees to designate their contributions as Roth contributions. The Roth 401(k) is similar to the Roth IRA in that after-tax money is being saved and grows tax-free, but, as its name implies, the new account will fall under 401(k) rules.
Target Benefit Plan - A target benefit plan is a hybrid or cross between a defined benefit plan and a money purchase plan. It is like a defined benefit plan in the annual contribution is determined by the amount needed each year to accumulate a fund sufficient to pay a projected retirement benefit to each participant upon reaching retirement age. However, unlike a defined benefit plan, these contributions are allocated to each participant’s account and if the actual investment returns differ from the assumptions in the plan, the participant’s retirement benefits may increase or decrease accordingly.
If a plan is categorized as a defined benefit plan:
1. plan formulas are geared to retirement benefits and not to contributions
2. the annual contribution is usually actuarially determined
3. certain benefits may be insured by the Pension Benefit Guarantee Corporation (“PBGC”)
4. early termination of the plan is subject to special rules; and
5. forfeitures reduce the company’s cost of providing retirement benefits
6. contributions to Defined Benefit plans can sometimes be significantly larger than to Defined Contribution plans.
Fixed Benefit Plan – Under this type of defined benefit plan, the benefit for each participant depends solely on a fixed percent of compensation.
Flat Benefit Plan – Retirement benefits are determined as a flat dollar amount.
Unit Benefit Plan – This type of defined benefit plan recognizes service with the company by providing greater benefits for a long-service employee than for a short-service employee.
In a defined benefit plan, if the actual experience of the plan differs from the actuarial assumptions used, then the employer either increases or decreases its future contributions to the extent necessary to provide the promised benefits.
Our staff includes a CFP®, QPA, QKA who is licensed to design and perform the calculations necessary to administer these plans with the utmost care and due diligence.