Through Defined Benefit Plans, employers can provide retired employees with a benefit that is "definitely determinable." In other words, the retired employee will know in advance how much income will be available every month after retirement begins. The benefit is based on a specified formula that is usually related to an employee's length of service and/or compensation.

Participants can estimate in advance what percentage of their pre-retirement income will be replaced with the combination of retirement plan benefits plus Social Security.

• Benefits don't have to be dependent on the length of time that the plan was in existence prior to an employee's retirement.
• If desired, can be designed to encourage early retirement.
• Can be structured to account for inflation and Social Security benefits.
• Employee's benefits are not affected by investment performance.

The cost of the plan is determined by the benefit being provided. The sponsoring employer must meet the required contributions once the plan is installed.

• Accounting for Defined Benefit plans is complex, increasing the administrative costs associated with such plans.
• Investment performance will affect the cost of the plan for the employer. Fund performance can affect sponsoring employer's costs.
• Plans may be difficult to understand and may not be appreciated, especially by younger employees.

McCready and Keene manages Defined Benefit Plans with assets totaling billions of dollars. To learn more about the services we offer associated with Defined Benefit Plans click on a link below:

Consulting
Plan Design And Interpretation
Plan Drafting
Plan Terminations
Employee Communication
Plan Mergers, Acquisitions and Spin-offs
Actuarial Valuation
FAS 87/88 Reporting
Compliance Testing
Form 5500 Completion with Schedules
Coordination With Other Advisors