THIS COMMUNICATION IS INTENDED FOR ONLY U.S.-QUALIFIED PLANS. THIS IS NOT APPLICABLE FOR PLANS QUALIFIED ONLY IN PUERTO RICO.
Pension Services, Inc. always strives to provide you with the best plan designs and with compliance that has been recognized by IRS, as well excellent service. As such, please review the following information in this e-mail carefully so that you may plan accordingly for 2023.
For our clients and advisors with qualified retirement plans maintained in the mainland U.S.A., the Internal Revenue Service (IRS) announced recently the contribution limits for retirement plan participants for 2023. In this regard, please note the following:
The annual compensation limit for plan purposes increases to $330,000.
The limitation used to determine who is a highly compensated employee increases to $150,000. Thus, an employee who earns more than $150,000 in 2023 will be considered a highly compensated employee in 2024.
Tax Deductions & Administer your plan in compliance with the Law
As you may be aware, our firm specializes in designing and administering customized retirement plans that are suited to maximize contributions and tax deductions to benefit owners/key employees.
Contrary to what many believe, there is no “one-size-fits-all” retirement plan. Every employer has a different company structure than the next. The one-size-fits-all strategy is suited for a “cookie-cutter” environment and not beneficial for the owner and key employees. Our prowess is in working directly with our clients to provide a custom design which best fits their needs and company structure. We utilize all areas of the Internal Revenue Code sections in order to design the best available plan tailored to your (or your client’s) specific retirement needs and goals.
Our plan design options include defined benefit, cash balance, 401(k) only, 401(k) combined with profit sharing, defined benefit/cash balance combined with 401(k) profit sharing plans, etc. Our 401(k) designs generally include a safe harbor provision which, depending on the design, allows the key employees to defer at the maximum level.
You should note that an employer who currently does not maintain a 401(k) plan can still establish a 401(k) plan for 2022 now and have designated employees maximize their contributions at the $67,500 limit (or, if at least age 50 in 2022, $61,000) for 2022. If you are interested in establishing a 401(k) plan for 2022 in order to maximize contributions, please contact us as soon as possible.
Below are some important deadlines for plan implementation:
Start up plans:
Deadline for Salary deferrals:
Finally, we wanted to close by thanking you so very much for your business – we truly appreciate your on-going confidence in our firm. It is important to us to ensure that our clients’ plans not only provide the best design for each plan sponsor, but also that all of our clients’ plans continue to satisfy Internal Revenue Service and Department of Labor rules. In fact, our firm has been recognized by the IRS for our compliance efforts. Our reports are being used to train Revenue agents in compliance matters. This is because bundled providers and most TPAs pass the burden of compliance to the plan sponsor by not preparing trust accounting and by not verifying employee census information. While they provide sponsors with reduced services (at the expense of qualification and penalties), we remain proud of our extremely strong dedication to compliance for all of our clients and their retirement plans.
Should you have any questions or comments, please do not hesitate to contact us.
|Robert Penafiel (President)
305-595-5500 ext. 210
|Kassandra Villalobos (New Business)
305-595-5500 ext. 225
3150 SW 38th Ave Suite 900
Miami, FL 33146