Employer Retirement Plans

JCB’s Trust Department coordinates all services necessary to establish and maintain employee retirement plans.

  • We work with employers to provide qualified retirement plans such as
    • pension
    • profit sharing
    • 401(k) plans
    • SIMPLE IRAs
  • Investment alternatives are available to meet the needs of all participants (regardless of age or retirement objective)

Employer Sponsored Retirement Plans – Which One is Right for You

  • Simplified Employee Pension (SEP)
    • You have until your tax return due date plus extensions to establish and fund a SEP
    • Contributions for each eligible employee may not exceed 25% of each individual’s compensation, or in 2011, $49,000 if less
    • The employer’s deduction limit for contributions made may not exceed 25% of the aggregate compensation paid to eligible participants
    • Features administrative ease, no government reporting, is less restrictive of who participates, and need not be funded each year or at a specified level
  • Simple IRA Plan
    • Plan must be established by October 1 for a current plan year
    • Employer may choose either a matching contribution or a non-elective contribution method
    • Annual deferral limit is $11,500 for 2011. These deferrals can be a flat dollar amount or a percent of pay. Catch-up deferrals up to $2,500 are allowed for employees age 50 and over during 2011
    • Employer match, if chosen is up to 3 percent of pay. Non-elective contribution is 2 percent for all eligible employees
    • Employer’s deduction limit is the same as the contribution limit
    • This plan features administrative ease, no government reporting, it avoids complicated nondiscrimination testing
    • Does not limit eligibility or employee access to funds
  • Profit-Sharing Plan
    • Plan may be established up until the end of your tax year
    • You can delay funding the plan until your tax return due date plus extensions
    • Flexible contributions are determined each year
    • Contributions limit is 100% of compensation or $49,000 for 2011, whichever is less
    • Employer’s deduction is limited to 25% of gross compensation paid to all eligible participants for the year
    • Allows flexible funding, allows restrictive coverage and allows vesting schedules
  • 401(k) Plan
    • Plan may be established up until the end of your tax year
    • Deferrals may only be made prospectively
    • Matching or other employer contributions may be made before employer’s tax return due date plus extensions
    • 401(k) component often added to profit-sharing plans
    • Contribution limit (employer and employee) is 100% of compensation, up to $49,000 for 2011
    • Employer’s deduction limit is 25% of gross compensation paid to eligible employees for the year
    • Deferral limit is $16,500 for 2011. Catch-up deferrals up to $5,500 are allowed for employees age 50 and over during 2011
    • This is a highly visible employee benefit, has flexible funding, allows restricted coverage and can include vesting schedules

Choosing the right retirement plan may be one of the most important business decisions you make. Ensuring that you select a plan that is affordable, administratively practical and compatible with your business objectives is your goal.

Are you establishing a plan to maximize personal contributions, to retain, attract and motivate quality employees? Are revenues steady or run in cycles of high and low cash flows? What costs in dollars and time are you willing to absorb.

For help in asking the right questions and getting the right answers, contact a JCB Trust professional today.