Retirement Plan Concepts & Services, Inc. is an independent third party administration firm offering a variety of retirement plan solutions benefiting clients across the United States. At RPCSI, we perform a full range of ongoing administrative and recordkeeping services including plan year end valuations, compliance testing and government reporting. We provide experienced administration for the following types of retirement plans:
401(k) Plans (Traditional or Safe Harbor)
Traditional 401(k) Plan
A 401(k) plan allows employees to contribute a portion of their income to an employer sponsored retirement plan on a pre-tax or Roth (after tax) basis. The employer may choose to make matching contributions into the plan. The employer may also use the plan to provide profit sharing contributions to all eligible employees. Highly compensated employee deferral and match contributions are limited by discrimination testing.
Safe Harbor 401(k) Plan
This plan is similar to the traditional 401(k) plan with the exception that highly compensated employee contributions are not limited by the discrimination testing. The employer must either make a 3% Safe Harbor non-elective contribution or a Safe Harbor match contribution of at least 100% of compensation on the first 3% deferred by the employee plus 50% on the next 2% deferred. Both of these Safe Harbor contributions are 100% vested immediately.
Profit Sharing Plans (Traditional, New Comparability, Integrated and Age Weighted)
Traditional Profit Sharing Plan
This plan type was designed for employees to share in the employer profits. Employer contributions are generally allocated to the participants in proportion to their compensation.
New Comparability PS Plan
Also referred to as a Cross Tested Plan. The goal of this type of plan is to maximize benefits for a group of employees (usually owners) while minimizing the contributions required for other groups (usually non-owners). Employees are divided into groups (or classes) with different contribution rates for each group.
Integrated Formula PS Plan
This type of plan correlates the employer contribution formula with Federal Social Security benefits. The Internal Revenue Code allows additional allocations on the compensation in excess of the Social Security Taxable Wage Base because these dollars do not accrue social security benefits.
Age Weighted PS Plan
The age-weighted profit sharing plan is a retirement plan design that allows employers to make contributions based on an employee's age as well as salary. Under this arrangement, there is a chance for older employees to receive contributions that are much larger than those received by younger workers.
A 403(b) plan is a retirement savings plan sponsored by 501(c)(3) entities (non-profit organizations) for their employees. These plans have many similarities to 401(k) plans, but have different rules on contribution limits, discrimination requirements, and other administrative requirements.
Money Purchase Plans
Money Purchase Plan
For money purchase plan, the annual employer contribution is fixed by a formula stated in the plan document. The employer must contribute according to the plan's established formula.
Davis-Bacon Plans (Prevailing Wage)
A plan for workers on federal and state construction contracts worth $2,000 or more and are paid the "prevailing wage", which includes a specified hourly fringe benefit amount. This plan allows the employer savings in payroll taxes by contributing all, or part of the fringe benefit portion of the required hourly rate into a qualified retirement plan.
Multiple Employer Plans
Multiple Employer Plan
A Multiple Employer Plan is a plan sponsored by 2 or more employers where at least 2 of the sponsoring employers are not members of the same related group. It allows unrelated companies to participate in one plan and share the retirement cost of administering a 401(k) plan.
Cash Balance/Defined Benefit Plans
Cash Balance/Defined Benefit Plan
A cash balance plan is a type of defined benefit plan that resembles a defined contribution plan. For this reason, these plans are referred to as hybrid plans. A traditional defined benefit plan promises a fixed monthly benefit at retirement usually based upon a formula that takes into account the employee's compensation and years of service. A cash balance plan looks like a defined contribution plan because the employee's benefit is expressed as a hypothetical account balance instead of a monthly benefit.
Each employee's "account" receives an annual contribution credit, which is usually a percentage of compensation, and an interest credit based on a guaranteed rate or some recognized index like the 30 year treasury rate. This interest credit rate must be specified in the plan document. At retirement, the employee's benefit is equal to the hypothetical account balance which represents the sum of all contribution and interest credits. Although the plan is required to offer the employee the option of using the account balance to purchase an annuity benefit, employees generally will take the cash balance and roll it over into an individual retirement account (unlike many traditional defined benefit plans which do not offer lump sum payments at retirement).
As in a traditional defined benefit plan, the employer in a cash balance plan bears the investment risks and rewards. An actuary determines the contribution to be made to the plan, which is the sum of the contribution credits for all employees plus the amortization of the difference between the guaranteed interest credits and the actual investment earnings (or losses).
Employees appreciate this design because they can see their "account" grow but are still protected against fluctuations in the market. In addition, a cash balance plan is more portable than a traditional defined benefit plan since most plans permit employees to take their cash balance and roll it into an individual retirement account when they terminate employment or retire.