Case Studies
We Focus On ResultsCase Study
Manufacturing plant with 100+ Employees Needed To Reconfigure Benefits Strategy after switching from PEO
Challenge
HR staff was struggling to properly enroll employees and handle all administrative functions required for the proper operation of the plan.
Solution
We took over responsibility for all administrative functions of the plan operation. All employees were properly enrolled. Processing of accurate payroll contributions and other transactions are completed in a timely manner. The plan has successfully passed independent audits since the inception of our services. 75% of employees are participating in the Plan. Plan assets have increased by more than $3 million dollars.
Results
Financial Services Firm
Introduction
We were referred to a boutique financial services company where the owner had been providing a 401(k) plan to his employees. The owner was profitable and in addition to the salary deferrals that employees could contribute on their own behalf, he also made a 5% profit sharing contribution to all eligible employees each year strictly based on compensation. RSA took a look at this company to see if we could unlock their economic opportunity in re-designing their 401(k) plan.
Challenge
Our goal was to tax shelter as much money as possible for the owner without having to increase the outlay to the other employees. In addition, we looked for a way to eliminate the possibility that the owner would ever have to take taxable refunds of his salary deferrals due to low participation and a failed non-discrimination test.
Solution
After reviewing the current plan documents and employee demographics, we determined that by adding a safe harbor provision and amending the profit sharing formula the owner could increase his annual profit sharing contribution over two and a half fold without any additional increase in funding to his employees. In addition, he did not have to worry about having any taxable refunds of his salary deferrals.
Benefit To Owner
%
Increased Profit Share Contributions
Case Study
Helping A Large
Non-Profit Reconfigure Benefits Strategy During a Merger For Over 1000 Employees
Challenge
Each organization previously sponsored different types of retirement plans for their employees. Retirement benefits provided by the legacy plans were not equivalent for all employees. A merger of the plans was not permitted.
Solution
Working in conjunction with the organization’s other service providers we have assisted the company to create a long-term strategy for the combination of the current retirement plans and leveling of the retirement benefits to be provided for all employees. The new combined plan will provide retirement benefits for more than 1,000 employees with combined plans assets of $50 million dollars.
Results
It Started Out Great. Then We Asked… Can We Deliver More?
Introduction
Through 2016, an existing client had a very successful defined contribution plan set-up. In 2016 the client had 24 employees and 2 owners. Through a 401(k) Profit Sharing Plan with a safe harbor QNEC and a cross tested Profit Sharing allocation, this client was able to contribute almost $100K in employer contributions while directing 70% of the contributions to the two owners. Additionally, these two owners were able to contribute another $24,000 each for total contributions to the two owners of almost $120K.
Opportunity
In 2017 we approached this client with the question of “Are they happy with their current system or are you looking to possibly shelter more?” This client answered that they would like to contribute more to the plan if the money could continue to be filtered to the two owners in the same ratio as past years. We were happy to tell them that adding a Cash Balance Plan to their current set-up would achieve this goal. During 2017 the client adopted a Cash balance plan that benefits all employees but with different benefiting levels for the two owners compared to the staff.
Results
The benefits of this new Cash Balance Plan are tested in the IRS regulations similarly to and along with the cross-tested Profit Sharing Contributions. There are now 37 benefitting employees including the two owners. The end result for 2017 was an increase in benefits to the staff that was far outweighed by a very large increase in the benefits for the two owners. Staff employees are happy with the new set-up since they are getting more money while the owners are getting larger contributions tax sheltered for themselves.
Benefits To Owners
Cash Balance
%
To Owners
Profit Sharing
%
To Owners
401 (k)
%
To Owners
Total Contributions
%
To Owners
Results
Resolving IRS Compliance Issues
Introduction
A company was referred to us because they had failed to have the owner take his 401(k) plan age 70 ½ required minimum distribution for a number of years and didn’t know how to correct this oversight.
Challenge
Our goal was to calculate the missed required minimum distributions including lost earnings and fix this plan operational error with a submission to the IRS using the Voluntary Compliance Program.
Solution
After reviewing the data provided, we calculated the missed required minimum distribution amounts for each year involved, prepared the VCP application materials on behalf of the company and submitted the package to the IRS.
Benefit To Owner
Resolved With Zero Fines Assessed
Testimonial
“I can’t believe it took us this long to make a change. So happy that we did. Numbers don’t lie.”
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