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Sample Compass Proposal

PLAN TYPES AND SERVICES

PLAN TYPES AND SERVICES PLOTTING AND MANAGING THE COURSE FOR YOUR RETIREMENT PLAN DEFINED BENEFIT PLAN OVERVIEW A traditional defined benefit (DB) plan can help retain key employees, allow for accelerated retirement savings (by allowing larger employer contributions), and provide greater employer tax deductions or tax deferral as compared to a defined contribution (DC) plan. Traditional DB pension plans promise employees a predefined lifetime monthly benefit starting at retirement. The amount of the benefit is known in advance and is usually based on factors such as: o Years of service o Compensation history o Age at retirement Advantages of a traditional DB plan for employees: o Deferred taxation: Employees defer taxation on their benefit accruals until they begin receiving benefit payments (monthly annuity payments or a lumpsum. o Income certainty: Employees know the specific benefit they will receive at retirement. o Increased savings: Higher contributions typically allow for larger benefits for highly compensated employees compared to a DC plan (based on factors such as age). o Increased contributions: Generally, employers can contribute more for employees with the least number of years until retirement. CASH BALANCE PENSION PLAN OVERVIEW A cash balance plan is a type of hybrid defined benefit plan that operates in ways similar to a profit sharing plan. A participant’s account grows annually through contributions and interest credits. The interest credit is guaranteed and is not dependent on the plan’s investment performance. Companies may be able to contribute more than the DC limits to benefit owners and highly compensated employees. Benefits to an employer: o Can provide for accelerated retirement savings (by allowing larger contributions and recognition of past service). o Assets are invested by the plan’s fiduciary or trustee (as opposed to individual plan participants), which provides the plan sponsor with more control over the investment strategy. o Easy to understand functionality mechanism. and funding Who is an ideal candidate for a cash balance plan? o Business owners who want to contribute more than $50,000 annually to a qualified plan. o Business owners who need to catch up on their retirement savings. o Business owners who want a more significant current-year tax deduction and tax-deferral. o Business owners with strong and reliable cash flow.

SERVICES AND PLAN TYPES (CONT) DB ACTUARIAL SERVICES We offer a full range of actuarial services, including annual actuarial valuations and reports including: o Monitoring the plan’s funded status o Monitoring the plan’s cash contribution requirements o IRS and PBGC information – filings and schedules o Pension accounting under GAAP and IFRS DB CONSULTING SERVICES Our consultants have knowledge and experience in a variety of areas including, but not limited to: o Plan design and review (including frozen and terminating plans) o Cost estimates and plan redesign proposals o Special early retirement windows o Supplemental executive retirement plans DB ADMINISTRATIVE SERVICES We assist clients by providing complete and accurate administrative services including: o Benefit calculation certifications and calculators. o Individual employee benefit statements. DEFINED CONTRIBUTION PLANS A defined contribution (DC) plan is a retirement plan in which a certain amount or percentage of money is set aside each year by a company for the benefit of each of its employees. The DC plan places restrictions that control when and how each employee can withdraw these funds without penalties. Compass handles plan design and administration for 401(k), profit sharing, 403(b), 457, and non-qualified deferred compensation plans. DC ADMINISTRATIVE SERVICES We offer a full range of administrative services such as annual valuations and reports including: o Administration and recordkeeping o Plan compliance o IRS information – filings and schedules o Plan documentation DC CONSULTING SERVICES Our consultants have knowledge and experience in a variety of areas including, but not limited to: o Plan design and review o Cost estimates and plan redesign proposals DC ADMINISTRATIVE SERVICES o Benefit statements o Enrollment meetings o Participant services o Plan design recommendations o Determination of eligibility of employees o Initial discrimination testing o Determination of eligibility of employees o Initial discrimination testing o Annual discrimination testing o Annual reports and benefit statements prepared for the plan participants o Track vesting of employee accounts We also handle trust reconciliation, preparation of governmental forms, and other essential documents.