Defined Benefit Plan Illustration

Defined Benefit Plan Minneapolis

(Provides the Highest Contribution and Tax Deduction – most effective with owner only companies with no employees)

Pension Consultants MinneapolisThe contributions for Defined Benefit Plan (s) are calculated based on the owners’ age(s) and compensation (or compensation history). The older the owner and the higher the compensation they have (up to IRS compensation limits), the larger the contribution allowed for the owner. Defined Benefit Plan Minneapolis. Defined Benefit Plans are not subject to the 25% employer deduction or participant contribution limitations.  

Defined Benefit Plans (DBP’s) are utilized mainly for owner only companies and sometimes cover the owner’s spouse. The following is only one example of how this type of plan can benefit your company when combined with a 401(k) Profit Sharing plan:




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Additional assumptions used in above calculations:

  • Rate of investment return is 5.5%.
  • Total Owner combined Federal & State Income Tax Rate assumed at 45%. You should consult your tax advisor as to the actual tax rates and your actual amount saved.
  • Contributions may vary in the future based on actual investment performance, plan, provisions and changes in tax regulations.
  • The numbers of participants included in the illustrations were limited for simplicity and comparability. However, all of the plans are able to serve from one to hundreds of participants.

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