Defined Benefit Plans

  • Generous contribution limits.
  • Enrolled actuary determines funding levels.
  • Must file annually with government.
  • Employer assumes all investment risk.

Defined benefits plans provide a fixed benefit generally tied to tenure and salary for employees at retirement.  The employer bears all investment.  These plans are especially advantageous for high-income professionals who can afford the costs to both set up and administer them.

  • 100% of the participant’s average compensation for his or her highest 3 consecutive years, or
  • $230,000