Defined Benefit and Cash Balance Plans - United Retirement Plan

Maximizing Client Value Through Plan Design: Defined Benefit and Cash Balance Plans JoiningYou Today Lance Kesterson Vice-President, National Sales and Marketing Martin Smith, FCA, EA, MSPA President & Actuary National Associates, Inc a United Retirement Company 2012 Webinar Series Copyright 2012 United Retirement Plan Consultants 2 Accidental, or on purpose ? 2012 Webinar Series Copyright 2012 United Retirement Plan Consultants 3 Maximizing Client Value Through Plan Design: Defined Benefit and Cash Balance Plans One Company. One Mission. One Focus. Non-Producing Consulting TPA About United Retirement 2012 Webinar Series Copyright 2012 United Retirement Plan Consultants 4 “Everyone ends up somewhere… 2012 Webinar Series Copyright 2012 United Retirement Plan Consultants … and very few get there on purpose” 5 Today’s on purpose

Agenda • Quick level-set on DC and DB Plans • Deeper dive into Defined Benefit Plans • Cash Balance Defined Benefit Plans • Guided Illustrations • Specific Opportunities • Next Steps 2012 Webinar Series Copyright 2012 United Retirement Plan Consultants 6 General Benefits of Qualified Plans • Creditor Protection • Tax Deductible Contributions • Tax Sheltered Earnings – Trust Doesn’t Pay Income Taxes – New January 1st – 3.8% Tax on Investment Income for AGI above $250,000 (Healthcare Reform) 2012 Webinar Series Copyright 2012 United Retirement Plan Consultants 7 Basic Feature Comparison • 401(k), Profit Sharing, etc. • Individual accounts • Benefit not known • Benefits not guaranteed • Account balance determines benefit • Contributions are known and specifically limited – $50,000/$55,500 for 2012 • Discretionary company contributions • Participant assumes risk 2012 Webinar Series Copyright 2012 United Retirement Plan Consultants Defined Contribution Plans Defined Benefit Plans • Traditional, Cash Balance • Individual accrued benefits • Benefits are known • Benefits Covered by PBGC * • Plan document determines benefit • Benefits are known and contributions are determined – Can be > $250,000 • Mandatory company contributions • Employer assumes risk * - Owner Only plans and professional firms with <25 employees not covered. 8 41 62 $1 7 , 0 0 0 $5 0 , 0 0 0 $2 0 0 , 0 0 0 $8 0 , 0 0 0 46 62 $1 7 , 0 0 0 $5 0 , 0 0 0 $2 0 0 , 0 0 0 $1 0 5 , 0 0 0 47 62 $1 7 , 0 0 0 $5 0 , 0 0 0 $2 0 0 , 0 0 0 $1 1 0 , 0 0 0 48 62 $1 7 , 0 0 0 $5 0 , 0 0 0 $2 0 0 , 0 0 0 $1 1 5 , 0 0 0 49 62 $1 7 , 0 0 0 $5 0 , 0 0 0 $2 0 0 , 0 0 0 $1 2 5 , 0 0 0 50 62 $2 2 , 5 0 0 $5 5 , 5 0 0 $2 0 0 , 0 0 0 $1 3 0 , 0 0 0 51 62 $2 2 , 5 0 0 $5 5 , 5 0 0 $2 0 0 , 0 0 0 $1 3 5 , 0 0 0...

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