|
Here is a comparison of the two previous plans and the new Profit Sharing Select plan. Note how the required contributions to the other employees have decreased allowing Nancy and Robin to maintain or increase their share while decreasing the overall cost. |
||||||||
|
% Owned |
Age |
Annual Salary |
Money Purchase |
Profit Sharing |
Total of Both Plans |
Profit Sharing Select |
Total Percentage Allocation |
|
|
Nancy Robin |
60% 40% |
48 44 |
180,000 150,000 |
18,000 15,000 |
27,000 22,500 |
45,000 37,500 |
45,000 35,343 |
25% 23.60% |
|
Mary Bill Chris Terry |
32 30 28 25 |
50,000 40,000 30,000 20,000 |
5,000 4,000 3,000 2,000 |
7,500 6,000 4,500 3,000 |
12,500 10,000 7,500 5,000 |
2,500 2,000 1,500 1,000 |
5% 5% 5% 5% |
|
|
Plan Totals |
470,000 |
47,000 |
70,500 |
117,500 |
87,343 |
|||
|
Key Employees |
330,000 |
33,000 |
49,500 |
82,500 70% |
80,343 92% |
|||
|
The Money Purchase Plan required a 10% of salary contribution to each participant. The Profit Sharing Plan is allocating a 15%
of salary contribution to each participant. With the Profit Sharing Select Plan, the majority owner is able to receive her individual 415 maximum
contribution of $45,000 and the employees need to receive a 5% of salary allocation for the plan to pass the required non-discrimination testing.
|
||||||||
| << previous | next >> |