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Pension/Profit Sharing

Companies that want to offer employees a tax-deferred savings plan and want the flexibility to change contributions annually look to pension and profit sharing plans as a benefit.

The employer has the flexibility to vary the contribution rate annually, the employer will fund the plan and the vesting schedule is available to the employees.

If you decide to have a Pension/Profit Sharing program, the programs are setup as follows:

The plan MUST include all employees who:

  • Are at least age 21
  • Have completed one year of service (must have worked at least 1,000 hours for the year).

The plan MAY exclude:

  • Union employees
  • Certain non-resident aliens (no age requirements)

Plan Contribution Limits

  • 15% or $50,000 (indexed), whichever is less (based on the first $250,000 of compensation).


  • Attainment of plan’s normal retirement age
  • Financial hardship
  • Permanent disability
  • Plan termination
  • Separation from service
  • Death
  • Maximum distributions required at age 70 1/2 or retirement, whichever is later

Deadline to Setup/Contribute

  • Plan must be adopted by employer’s year end
  • Employer contributions must be made by employer’s tax filing deadline, plus extensions.

For more information, please call us at 1.800.508.1144

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