Defined Benefit (Traditional/ Cash Balance)

TransGlobal retirement plan

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Advantage
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Guaranteed retirement income
Employees are guaranteed a specific retirement income, based on a formula that takes into account their salary and years of service with the company.
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Responsibility for investment risk
In a DB plan, the employer is responsible for making sure there is enough money in the plan to pay promised benefits to retirees.
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Tax advantages for both employers and employees
Employers can deduct plan contributions as a business expense, and employees do not pay taxes on the contributions until they receive the retirement income.
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Long-term planning
DB plans are designed to provide retirement income for the long-term. This is particularly important for those who work for government entities.
Requirement
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Employer Sponsorship
The plan must be sponsored by an employer who offers a Defined Benefit plan.
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Actuarial Calculations
Defined benefit plans typically require actuarial calculations to determine the amount of the employer's contributions and the benefits payable to employees.
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No Annual Contribution Limits
Contributions are determined by the actuarial calculation and can be adjusted as necessary to ensure the plan is adequately funded.
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Pension Benefit Guaranty Corporation (PBGC) Insurance
Defined Benefit plans are required to be insured by the PBGC, a federal agency that provides insurance protection for participants.
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Vesting
Employees must work for a certain number of years before becoming fully vested in the plan and entitled to the promised retirement benefit.
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Government reporting
Defined benefit plans may be required to file periodic reports with government agencies, such as the Internal Revenue Service (IRS) in the United States.
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Who
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Employer Sponsorship
Occupation
Self-employed

The process

  • Initial inquiry
  • Proposal review
  • TransGlobal service agreement
  • Plan setup
  • Plan implementation
  • Plan investments
　　
Initial inquiry

STEP 1

 

 

Client or agent will complete the Pension Inquiry form or website application to provide information to TransGlobal. The information provided allows TransGlobal to generate a proposal with maximum contributions based on independent variables.

 

Start Inquiry 

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Proposal review

STEP 2

 

 

Agent and/or TransGlobal team member presents the proposal to the client to explain each contribution amount. The administration fee structure will also be reviewed here.

 

Start Inquiry 

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TransGlobal service agreement

STEP 3

 

 

Once the client understands the proposal and wishes to proceed to plan setup, the TransGlobal Service Agreement will need to be signed. This form details all direct fees charged to the client and explains TransGlobal's responsibilities as the plan administrator.

 

Start Inquiry 

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Plan setup

STEP 4

 

 

TransGlobal applied for plan documentation on behalf of the client's business. A new EIN number will need to be procured to identify the pension plan trust. The client will need to review and sign the completed SS-4 form provided by TransGlobal prior to submission.

 

Start Inquiry 

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Plan implementation

STEP 5

 

 

Once the plan documents are issued and received by TransGlobal, a TransGlobal team member will meet with the client to discuss the details and structure of the newly established pension trust. The client's signature will be required to approve the plan documents.

 

Start Inquiry 

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Plan investments

STEP 6

 

 

Finally, an account will need to be set up to receive the contributions for the pension plan. The type of account that will be opened may vary due to the client's profile. Due to the limitations of qualified plans, a TransGlobal team member may assist in recommending a suitable account.

 

Start Inquiry 

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Compare all plans for self-employed or small business owner
See the different between Solo 401k and Roth 401k to insure which plan is more work for you
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Higher annual Contribution Limits
Wide investment Option
Accurate Record keeping
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Roth IRA
Designed for self-employed individual
Tax-free withdrawals
No required minimum distributions (RMDs)
No age limit
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Easy to Set Up and Administer
High Contribution Limits
Tax Benefits
Flexibility
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Tax Benefits
Matching Contributions
Employee Contributions
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Solo 401k

Tax Saving made easy

 

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