When it comes to retirement planning, small business owners have an opportunity to use their business structure to advance their retirement goals by establishing an IRS approved small business retirement plan. The benefits include an ability to save more on a tax deferred basis, increase business deductions and attract talented employees. Opus Financial Solutions can help with plan design and implementation. The main plan types available are Simplified Employee Pension (SEP) plans, Savings Incentive Match PLans for Employees (SIMPLE) plans, 401(k) and/or profit sharing plans, and defined benefit plans. 

Plan Design Steps

Step 1. Plan Goals

Our Plan Design step starts with a discussion to determine the business owner's goals in establishing a plan. Below are examples of the questions we will discuss. 

  • Do owners want to maximize contributions to owners with minimum contribution to employees?
  • Is intent to establish a plan as a benefit to attract employee talent?
  • How much would owners like to contribute for their own accounts? 
  • How willing are owners to have business contribute to employee accounts?
  • Do owners want to require employee participation in order to receive a contribution
  • Employee normal turnover
  • Willingness to assume fiduciary liability. 
  • Are there any existing retirement plans in place?
  • Entity fiscal year. 
  • Variability in profitability
  • Company growth plans and expectations
  • Would owners like a plan with a ROTH option?

An easy way to start the process is to fill out and submit the following Retirement Plan Fact Finder. 

Retirement Plan Fact Finder

Step 2. Collect Owner and Employee Census

Each retirement plan has distinct rules established by the IRS to limit discrimination against employees in favor of owners. In order to evaluate which plans meet the goals specified in step 1, we will collect an employee census. Below is a sample of the information we will collect.

  • Owner Information
    • Owner names
    • Owner date of birth
    • Owner years of employment
    • Share of ownership
    • Affiliated business ownership or control groups
    • Taxable entity type (sole proprietor, partnership, S or C corporation)
    • Owners compensation
    • Company profit
  • Employee Information
    • Employee name
    • Employee date of birth
    • Years of company employment and prior year company earnings
    • Employee compensation including expected bonuses. 
    • Class of employee

Step 3. Plan Selection and Recommendation

Based on the plan design goals and employee census, Opus will evaluate plan alternatives which most closely matches the goals with what is allowed based on the census. Following is a brief summary of some of the main plan characteristics.

If you would like to explore whether a small business retirement plan can benefit you, or if you have an existing plan which you would like to review, please use the Get in Touch form below to reach out and schedule an introductory meeting. 

We have a secure online meeting platform and serve clients across the United States. To set up a complimentary call or meeting, please fill out the “Get in Touch” information below.