Christopher MarkowskiArticle, Financial PlanningLeave a Comment

There is a very attractive new option for employer sponsored retirement plans that will become available next year. The DB(k) will provide businesses with 500 or fewer employees an opportunity to provide a strong retirement plan for their employees with a lot less paperwork, hassles and cost than a traditional pension plan. The DB(k) is a hybrid that blends the traditional 401(k) with a small guaranteed income stream.

The key plan elements:

1. A defined benefit equal to 1% of final average pay for each year of the employee’s service, up to 20 years.

2. An automatic enrollment feature for the 401(k) portion. Unless an employee specifically opts out or changes the contribution level, 4% of pay is automatically shunted into 401(k) savings.
3. An employer match of at least 50% of employee 401(k) contributions, with a maximum required match of 2% of pay.

We are currently helping small businesses make the change over to the DB(k). For more information please contact Matthew Markowski

Taxpayers who took a required minimum distribution from IRA, 401(k), or other qualified retirement accounts this year have until November 30 to deposit the money back tax free. The IRS suspended the required distributions for tax year 2009 and due to the fact the rule change occurred so late in 2008 many people had already taken distributions.

Pryde Joan The DB(k) Pension of the Future Kiplinger Resource Center 8/19/09

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