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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