A profit sharing plan is the most flexible qualified retirement plan an employer can offer to its employees. Contributions are discretionary, and each year the employer can decide whether to make a contribution and, within certain parameters, in what amount. The most simple profit sharing plan allocates contributions among participants pro-rata, based on compensation. Using this “plain vanilla” contribution model, if owners or key employees of a business wanted to have a contribution of 20% of pay, then all other participants must also receive contributions equal to that same percentage.Read More
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