Retirement Plans for Your Business
Retirement plans are an important benefit for your employees and a tax benefit for you. The right
plan can attract good people and help them succeed financially while staying within your financial
means and reducing your taxes.
As you can imagine, retirement plan rules are complex. At D.A. Davidson & Co., we take the hassle
and confusion out of choosing, setting up, and operating the right plan for your business.
With our help, you can select, customize, introduce, manage and administer the right retirement plan for your business.
Retirement plan services from D.A. Davidson & Co. are:
- Low cost: Our prototype plans are pre-approved by the IRS. Utilizing a prototype saves time and reduces
paperwork and costs.
- Flexible: The prototype plan that best meets your needs can be customized. We explain and help you
choose options regarding contribution levels, employee eligibility, vesting schedules, and other plan
- Professional: We provide accurate, in-depth information so that you know exactly what you’re getting into. We
understand the complexities of retirement plans and the needs of businesses.
- Personal: We get to know you and want what’s best for you. We want to build a relationship with your
business, providing financial services to help you prosper.
- Complete: D.A. Davidson & Co. can be your single retirement plan source. Beyond the plan setup, we
can arrange services to help you educate your employees, conduct enrollment meetings, and
administer your selected plan.
See the below summary to identify the types of plans that might interest you.
Let us know, and we’ll help you understand the specifics for your business. From there, we can
arrange everything you need to set up the right plan for your business get it up and operating
||Simplified Employee Pension Plan (SEP)
||401(k) Deferral Plan
||Money Purchase Pension Plan
|Contributions by Employer
|Contributions by Employee
|Vesting 3: 100% Immediate4
|Vesting: Based on years of service5
|Plan Administration: Minimal
||No - Substantial
||No - Substantial
||No - Substantial
|Annual Tax Filing
|Employee Borrowing on Account
Simplified Employee Pension Plan (SEP)
Employer annually contributes 0-25% of total compensation of eligible employees. Employer contribution rate can vary from year to year, but generally must be the same percent for all eligible employees in any given year.
Employees contribute up to $12,5006
each in deferred income through payroll
deduction. Employer either (1) matches
employee contributions dollar for
dollar up to 3% of individual employee
compensation, or (2) contributes 2% of
individual compensation for each eligible
employee. If age 50 or older, catchup
contribution of $2,500 may be allowed.
*Note: Employer’s choice of either
3% match or 2% contribution
option can vary from year to year, but
generally must be the same percent
for all eligible employees
in any given year.
A maximum employer contribution of
0-25% of total employee compensation will
be deductible. Employer has choices in
establishing vesting schedules, contribution
amounts, and eligibility. *Note: Along with 401(k) and money
purchase pension plan, allows
some flexibility on who can be
excluded from the plan.
401(k) Deferral Plan
Similar to a profit-sharing plan (0-25%
employer contribution), except each
employee may be able to contribute up
to $18,0007 in deferred compensation
through payroll deduction. If age 50 or
older, a $6,000 catch up contribution may
*Note: For many employees, allows a
greater self-contribution than
under a Simple IRA.
Money Purchase Pension Plan
The employer contribution rate is 0-25%
of total employee compensation. A profit
sharing plan may be a better choice since
it also allows a 25% contribution.
*Note: Percent employer contribution
selected in first year of plan locks in
for subsequent plan years, with some
provisions for amendment.
1These plan descriptions are not all-inclusive. Before adopting any retirement plan, obtain professional legal and tax advice.
2All employer contributions are generally tax-deductible. Also, for any employee, the maximum total employee/ employer contribution in any year is the lesser of (1) $53,000, or (2) 100% of the employee’s compensation. Age 50 and over may contribute additional catch-up employee deferral of $6,000. For Simple IRA contribution limits see the Simple IRA contribution profile.
3An employee is said to be vested when (s)he becomes entitled to all employer contributions made by the employer.
4Under 100%, immediate vesting, the employee is entitled to all employer contributions immediately upon their deposit. Further, these
contributions can be withdrawn by the employee at any time, subject to tax penalties. This approach, while attractive to the employee, may
defeat the employer’s goal of helping employees plan for retirement.
5 Under vesting based on years of service, the employee becomes entitled to employer contributions after completing a
specified period of employment. Upon vesting, the employee may make withdrawals only in the event of certain maturing events, including
termination of service, retirement, death, or disability.
62015 - $12,500. Changes for future tax years are then indexed in $500 increments.
72015 - $18,000. Changes for future tax years are indexed in $500 increments.