About Pension Plans
Planning for the future is one of those things that’s on everyone’s to-do list. Actually sitting down to do it is the challenge.
Pension plans fall into two categories: qualified and non-qualified. Qualified plans are the most common and offer several key benefits: the growth inside a qualified plan and employee contributions are not taxed until it is distributed; employer contributions are tax-deductible. There are two types of qualified plans:
- Defined Benefit Plan - In this type of plan, an employer pays a retired employee a fixed amount, based on a formula that includes an employee's age, earnings and years of service. Most employers fund these plans by placing money in dedicated investment funds managed by professional money managers.
- Defined Contribution Plans - In this type of plan, employees contribute to their own pension accounts and assume a share of the investment risk. In some cases, the employer also contributes to the plan, usually by matching the employee's contribution. Some of the most popular retirement plans, including 401(k) plans, fall into this category.
At Carl Puma Agency we understand what goes into planning for the future and can provide the tools and resources to help you set up a private pension plan. Our team will help you review your current financial and insurance situation, and identify any shortcomings.
Small businesses benefit from our vast experience in employer-provided pension plans, too. Providing a good plan is a great way to attract and retain the best employees.