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Profesional Services

Plan Types

401(k) Plan :

• This is a modified type of profit sharing plan which allows the employees to voluntarily contribute, through payroll deduction, an amount of their salary to the plan. These "elective deferrals" are pre-tax monies contributed to the plan, and are not subject to current taxation as compensation. (They are, however, subject to Social Security taxes.)

• In addition to the elective deferrals, the employer may structure the plan to accept various types of employer contributions to the plan, including matching types of contributions and profit sharing contributions.

• Although some 401(k) plans are established with funding only from employee elective deferrals, this type of program is generally created to form a funding partnership between employer and employees. It is one of the most popular programs available due to its flexibility, and the fact that funding by employees can relieve the employer of some of the burden of annual contributions, while still providing an employee retirement benefit program of great perceived value.