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Employee Pension Plans

Pension Plans

American Insurance and Investments utilizes LPL Financial to provide access to traditional pension plans. With these employer-sponsored and funded retirement plans, retirees are paid a fixed amount, based on the number of years worked and salary history. ^†

Pension plans are best for businesses with more than ten employees, and are valuable for attracting and retaining top employees.

Traditional pensions are commonly referred to as Qualified Plans, and there are two types: Defined-Benefit and Defined-Contribution. Defined-Benefit Plans are funded by employer contributions and are guaranteed by the Pension Benefit Guaranty Corporation (PBGC). Employee-sponsored retirement plans such as 401(k), 403(h) and 457 plans are called Defined-Contribution plans. Defined-Contribution plans are funded in large part by employee contributions and are not guaranteed by the PBGC.

You'll Get:

• Flexibility in designing qualified plans
• Increased contribution and deductions limits in some cases

Defined Benefit Plan

Maximum Contribution: Amount needed to provide an annual benefit not larger than the smaller of $160,000 or 10% of the participant's average compensation for his or her highest three consecutive calendar years

Maximum Deduction: Based on actuarial assumptions and computations

Talk to your tax advisor to learn more about how pension plans can benefit your business.

Defined Contribution Plan

Maximum Contribution
Money purchased: smaller of $40,000 or 100% of the participant's compensation

Profit sharing: smaller of $40,000 or 100% of participant's compensation

Maximum Deduction
Money purchased: 25% of all participant's compensation profit sharing: smaller of $40,000 or 100% of participant's compensation