Clearly Defined
Retirement Plans
An Overview
We primarily administer qualified retirement plans, which offer tax advantages and greater flexibility than other plan types. These plans allow businesses to deduct contributions and possibly receive a tax credit (under certain circumstances) while building meaningful retirement benefits for owners and employees.
Qualified Plans
Defined Contribution Plans
Defined Contribution plans, such as 401(k) Profit Sharing Plans, are the most common retirement structures, offering flexible, contribution-based designs that can be tailored to support both business goals and employee participation.
Defined Benefit Plans
Defined Benefit plans allow for larger contributions than Defined Contribution plans. This enables business owners to maximize and accelerate retirement savings which provides larger tax deductions over a shorter time horizon.
Carefully Shaped
Defined Contribution Plans
DC
Defined Contribution plans are widely used for their versatility and scalability, making them a strong fit for employers who want a structured yet adaptable approach to retirement benefits. Plan design can go beyond uniform contributions, allowing businesses to group employees and allocate funds strategically to better support ownership goals while still benefiting the broader team.
At their core, these plans are driven by contributions rather than a promised outcome, with profit sharing typically ranging from 0–25% of pay and the ability to vary amounts across roles or classifications. When combined with employee deferrals and age-based catch-up provisions, they offer meaningful opportunities to build retirement savings while maintaining flexibility in annual funding.
Additional design features—such as safe harbor provisions, testing strategies, auto-enrollment, and layered matching formulas—allow the plan to be fine-tuned over time, helping ensure compliance while aligning closely with the company’s financial objectives and workforce structure.
Key Points
Flexible contribution structures, including profit sharing, discretionary match, and/or Safe Harbor
Ability to allocate Profit Sharing contributions across different employee groups using New Comparability (Cross Testing)
Annual Employee salary deferral limits (e.g. $24,500 + $8,000 catch-up or $11,250 Super catch-up contributions) in 2026
Annual Additions (415(c)) limits up to $72,000 per participant in 2026 (provided compliance testing supports the contribution). This does not include catch-up or Super catch-up contributions.
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A defined contribution plan under which the plan may provide, or the employer may determine, annually, how much will be contributed to the plan (out of profits or otherwise). The plan contains a formula for allocating to each participant a portion of each annual contribution. A profit-sharing plan may include a 401(k) plan.
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Profit Sharing Plan
A defined contribution plan under which the plan may provide, or the employer may determine, annually, how much will be contributed to the plan (out of profits or otherwise). The plan contains a formula for allocating to each participant a portion of each annual contribution. A profit-sharing plan may include a 401(k) plan.
401(k)
A defined contribution plan where an employee can make contributions from his or her paycheck either before or after-tax, depending on the options offered in the plan. The contributions go into a 401(k) account, with the employee often choosing the investments based on options provided under the plan. In some plans, the employer also makes contributions such as, matching the employee’s contributions up to a certain percentage. Some 401(k) plans have mandatory employer contribution requirements.
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Profit Sharing Plan
A defined contribution plan under which the plan may provide, or the employer may determine, annually, how much will be contributed to the plan (out of profits or otherwise). The plan contains a formula for allocating to each participant a portion of each annual contribution. A profit-sharing plan may include a 401(k) plan.
Roth 401(k)
An employer-sponsored investment savings account that is funded with after-tax money. After the investor reaches age 59.5, withdrawals of any money from the account (including investment gains) are tax-free.
401(k)
A defined contribution plan where an employee can make contributions from his or her paycheck either before or after-tax, depending on the options offered in the plan. The contributions go into a 401(k) account, with the employee often choosing the investments based on options provided under the plan. In some plans, the employer also makes contributions such as, matching the employee’s contributions up to a certain percentage. Some 401(k) plans have mandatory employer contribution requirements.
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A money purchase plan requires set annual contributions from the employer to individual accounts and is subject to certain funding and other rules.
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A type of defined contribution plan that is invested primarily in employer stock.
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A tax-sheltered annuity plan, this is a retirement plan offered by public schools and certain tax-exempt organizations. An individual’s 403(b) annuity may be obtained from a variety of sources, depending on the plan’s ERISA or non-ERISA status. Generally, these annuities are funded by elective deferrals made under salary reduction agreements and nonelective employer contributions. 403(b)s may be ERISA or non-ERISA plans and generally have more filing and legal requirements than in years past.
Types of Defined Contribution Plans
Pruned for Growth
Defined Benefit Plans
DB
Defined Benefit plans are often the most misunderstood type of qualified plan, yet they can be one of the most powerful—especially for those seeking to make larger retirement contributions. When properly designed, these plans can allow for contributions exceeding $250,000 per year for business owners, depending on factors such as age, income, and overall workforce demographics.
Contributions are designed to exceed the Annual Additions limit in 401(k)s so that business owners or other targeted employees can receive a larger contribution. This structure makes Defined Benefit plans particularly well-suited for professional service organizations—such as medical, legal, or dental practices—or any business with higher-earning owners. Additionally, through proactive plan design and amendments, we can create flexibility each year take into consideration a businesses’ budgeting goals.
Key Points
Potential for significantly higher contributions (often $250,000+ annually)
Through plan design, we can create flexible contributions year after year
Ideal for business owners seeking to accelerate retirement savings
Particularly effective for professional service firms, high-income earners, or owner-only companies
Types of Defined Benefits Plans
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A type of defined benefit plan that includes some elements that are similar to a defined contribution plan because the benefit amount is computed based on a formula using pay and interest credits, and each participant has a hypothetical account. Both Cash balance and traditional defined benefit plans may allow annuity or lump sum distributions.
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A traditional pension plan that defines a benefit for an employee upon that employee’s retirement is a defined benefit plan. The most common type of formula used is based on the employee’s terminal earnings (final salary).
Dual and Combined Tested Plans
Combinations & Arrangements of Qualified Plans
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Technically, these are DB plans, but can operate like a DC in that they give account statements to participants like a 401(k) helping better communicate the benefit to employees. Additionally, Cash Balance Plans can often meet goals better for two owners who have large gaps in age. Under a Cash Balance Plan, contributions can be tailored to give a similar dollar amount to each owner.
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These DC plans are tested like a DB plan, so contributions are skewed towards older employees or owners helping get more mileage out of the contributions for owners.
Let’s Design the Right Plan for Your Business
Meet with us in person near our Seattle or Austin offices, or connect from anywhere in the U.S. by phone, email, or virtual meeting to begin shaping the right retirement plan for your business. Click the button to submit an inquiry form, or contact us directly by calling our main office at (425) 615-7999.