A pension plan is a qualified retirement plan that provides a full tax deduction for the company contribution.
Defined benefit plans allow the company to work backwards from the benefit that they wish to provide for each employee to the cost per employee.
Contributions are deductible from state and federal taxes and accumulate on a tax-deferred basis.
Now that Profit Sharing plans allow contributions of up to 25% of covered payroll, many may want to revise their defined contribution plans to take advantage of a profit sharing plan's increased flexibility.
...many may want to revise their defined contribution plans to take advantage of a profit sharing plan's increased flexibility...
Dixon Associates serves companies in Eastern Massachusetts. These products can vary substantially from state to state. These descriptions are based on Massachusetts legislation.
