Qualified Plans
Qualified Plans
Qualified Plans
The IRS has created a number of retirement savings vehicles for employers of all sizes to use to save for their and their employees’ retirement.
A qualified plan must meet a number of Internal Revenue Code requirements under Section 401(a) such as minimum coverage, benefits, participation, and vesting to name a few.
In return, the IRS provides the following tax advantages when businesses set up plans:
- Deductions for current contributions
- Tax deferred earnings on investments until distribution
- Employees may have opportunity to make pretax or after-tax contribution
- Deduction for ongoing plan expenses
In addition to tax benefits, qualified retirement plans have the following advantages:
- Attract talented employees with a great benefit package
- Retain valued employees by rewarding their service
- Disciplined savings tool to help employees meet retirement needs
- Significant savings accumulation in a short period of time
- Protection from creditors