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Transcript of Oppenheimer funds are distributed by OppenheimerFunds Distributor, Inc., 225 Liberty Street, New...
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Oppenheimer funds are distributed by OppenheimerFunds Distributor, Inc., 225 Liberty Street, New York, NY 10281-1008 © 2015 OppenheimerFunds Distributor, Inc. All rights reserved.
Shares of Oppenheimer funds are not deposits or obligations of any bank, are not guaranteed by any bank, are not insured by the FDIC or any other agency and involve investment risks, including the possible loss of the principal amount invested.
The firm indicated above is not a subsidiary of OppenheimerFunds, Inc., nor is the individual indicated above employed by OppenheimerFunds, Inc. or any subsidiaries . Products offered through OppenheimerFunds.
Retirement Plans for Small Businesses
Financial Advisor’s NameFinancial Advisor’s TitleFinancial Advisor Firm
Mm/dd/yyyy
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Less than 50% of companies with 99 employees or less offer a retirement plan.
Source of data: LIMRA Study Finds Less than Half of Small Business Offer Employee Benefits, January, 28, 2013
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Increasing life expectancy
Rising health and long-term care expenses
Decreasing government benefits
Steady inflation
Future Realities
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...that prevent business owners from establishing a retirement plan.
1. “My business will subsidize my retirement.”
2. “I can’t afford a plan.”
3. “Employees want money, not benefits.”
Three Myths…
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“My business will subsidize my retirement.”
Fact:
Relying on a single venture is risky
Myth #1
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Unexpected hardship
Economic downturn
Decrease in the market value of your business
Factors that May Affect the Value of Your Business
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“I can’t afford a plan.”
Fact:
Today’s plans are
• Affordable
• Flexible
• Simple
• Just as advantageous
Myth #2
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“Employees want money, not benefits.”
Fact:
Employees are increasingly concerned about retirement benefits
Myth #3
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Postponement of taxes on contributions and earnings until withdrawal1
Control over the investment of your account
What’s In It for You?
1. *Withdrawals prior to age 59½ may be subject to a penalty tax in addition to ordinary income taxes.
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$46,204$35,499
$30,070$27,146
Retirement Plan2
15% Tax Bracket3
28% Tax Bracket3
35% Tax Bracket3
The illustration here shows how much faster money can grow in a tax-advantaged retirement plan relative to a comparable investment in a non-tax-favored vehicle. Assumes $100 of salary saved per month, 6% rate of return, 20-year savings period.1
What’s In It for You?The potential for accelerated growth of savings due to tax-deferred compounding
1. This hypothetical example is not intended to show the performance of any Oppenheimer fund, for any period of time, or fluctuations in principal value or investment return.
2. Retirement assets are taxed when withdrawn. Withdrawals prior to age 59½ may be subject to a penalty tax in addition to ordinary income taxes.
3. Example assumes a tax rate of 20% on capital gains for the accounts that are not in a retirement plan. Income tax is calculated on contribution of $100 pre-tax income. Assumes income taxes paid on contributions to savings and capital gains taxes paid on gains upon withdrawal in a non-tax deferred account
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Nondiversified Portfolio Diversified Portfolio
What’s In It for You?Diversification through Mutual Funds
The same $100,000 split into five $20,000 investments, each earning a different rate of return (in one case showing a loss), for the same 20-year period
$100,000Initial Investment
$534,946Total Return $327,331
15% Return
$134,54910% Return
$53,0665% Return
$20,0000% Return
$0$20,000 Lost
$100,000 placed in a single investment earning 5% a year for 20 years with no other changes to principal
$265,329Total Return
$100,000Initial Investment
Total return for a particular period is the ending redeemable value of the initial investment at the end of the period shown, assuming reinvestment of all income during the period annually. Actual returns on any particular investment will depend on the particular market factors and risks applicable to that investment. A diversified portfolio does not guarantee greater returns than a non-diversified portfolio.This hypothetical example is not intended to show the performance of any Oppenheimer fund, for any period of time, or fluctuations in principal value or investment return. Retirement assets are taxed when withdrawn. Withdrawals prior to age 59½ may be subject to apenalty tax in addition to ordinary income taxes.
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Employer contributions are a tax-deductible business expense
Low cost way to add a major incentive to your benefits package
Provides flexibility and control
What’s In It for Your Business?
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Postponement of taxes on contribution and earnings until withdrawal
Control over the investment of their accounts
Potential for accelerated growth of savings due to tax-deferred compounding
Diversification
Asset allocation1
Added peace of mind
What’s In It for Your Business?
1. Asset allocation cannot eliminate the risk of fluctuating prices and uncertain returns.
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Your situation might call for a new plan
You’re ready for the enhanced service, broader options and the experienced investment management that OppenheimerFunds provides
I’ve Already Got a Plan, Why Change?
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SIMPLE IRA
SEP IRA
Payroll Deduction IRA
401(k)
Safe Harbor 401(k)
Single K PlanSM
Profit sharing
Non-traditional Profit-sharing plans
Defined Benefit
Non-qualified Deferred Compensation
Which Retirement Plan Is Best for My Business?
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CompensationSIMPLE IRA
SEP IRA
Profit-sharing Single K
Defined Benefit
$40,000 $13,700 $10,000 $10,000 $28,000 Annual benefit as high as $210,000
(depends on income, age, years to retirement)
$80,000 $14,900 $20,000 $20,000 $38,000
$100,000 $15,500 $25,000 $25,000 $43,000
$140,000 $16,700 $35,000 $35,000 $53,000
Comparing Plan Types Maximum Annual Contributions 2015Employee Deferrals (not including catch-up) and Employer Contributions
Calculations are based on an incorporated business making the maximum allowable tax deductible contribution of 25% and does not include catch-up contributions.
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Incorporated businesses
• W2 wages
Unincorporated businesses
• Earned income
• (Net profits – ½ Self-Employment Tax) /(1 + Profit-sharing contribution percentage)
To calculate employee contributions for qualified plans, please refer to the worksheet found in IRS Publication 560 Retirement Plans for Small Businesses at http://www.irs.gov
Defining Compensation
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The Savings Incentive Match Plan is for...
Businesses with 100 or fewer eligible employees that do not maintain another retirement plan
Individuals with self-employment income earned on a part- or full-time basis
Nonprofit organizations (including government entities)
SIMPLE IRASEP IRA
Payroll Deduction IRA
401(k)
Non-traditional Profit-sharing plans
Profit-sharing
Safe Harbor 401(k)
SIMPLE IRA
Defined Benefit
Non-qualified Deferred Comp.
Single K PlanSM
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Employee Contributions
Employees can also make pretax salary deferrals equal to the lesser of $12,500 or 100% of compensation for 2015
Participants age 50 and above can make catch-up contributions equal to $3,000
SIMPLE IRASEP IRA
Payroll Deduction IRA
401(k)
Non-traditional Profit-sharing plans
Profit-sharing
Safe Harbor 401(k)
SIMPLE IRA
Defined Benefit
Non-qualified Deferred Comp.
Single K PlanSM
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Mandatory Employer Contributions
Two ways for employers to fund it
• Dollar-for-dollar match of participant’s contributions, up to 3% of compensation
• May be reduced to a minimum of 1% in any two years out of a five-year period
SIMPLE IRASEP IRA
Payroll Deduction IRA
401(k)
Non-traditional Profit-sharing plans
Profit-sharing
Safe Harbor 401(k)
SIMPLE IRA
Defined Benefit
Non-qualified Deferred Comp.
Single K PlanSM
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Two ways for employers to fund it
Or
Non-elective 2% contribution of each eligible employee’s compensation, regardless of whether the employee makes deferrals to the plan
SIMPLE IRASEP IRA
Payroll Deduction IRA
401(k)
Non-traditional Profit-sharing plans
Profit-sharing
Safe Harbor 401(k)
SIMPLE IRA
Defined Benefit
Non-qualified Deferred Comp.
Single K PlanSM
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Major Benefits
Employers may contribute up to the maximum allowed
No discrimination testing
Low administration cost
Employee salary deferrals permitted
Employer contributions are tax-deductible
Simple to administer; no annual filing requirements
Limited fiduciary responsibility
SIMPLE IRASEP IRA
Payroll Deduction IRA
401(k)
Non-traditional Profit-sharing plans
Profit-sharing
Safe Harbor 401(k)
SIMPLE IRA
Defined Benefit
Non-qualified Deferred Comp.
Single K PlanSM
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Considerations
Employer contributions are mandatory
Employees are immediately 100% vested
Contribution ceiling is relatively low when compared to other plans
SIMPLE IRASEP IRA
Payroll Deduction IRA
401(k)
Non-traditional Profit-sharing plans
Profit-sharing
Safe Harbor 401(k)
SIMPLE IRA
Defined Benefit
Non-qualified Deferred Comp.
Single K PlanSM
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Ideal for sole proprietors or small business owners with variable earnings and looking for a retirement plan with minimal administration
Individuals with self-employment income, earned on either a full-or part-time basis
Simplified Employee Pension Plan (SEP)
SEP IRA
Payroll Deduction IRA
401(k)
Non-traditional Profit-sharing plans
Profit-sharing
Safe Harbor 401(k)
SIMPLE IRA
Defined Benefit
Non-qualified Deferred Comp.
Single K PlanSM
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Employer Contribution
Funded solely by the employer
Incorporated businesses can contribute up to the lesser of 25% of compensation or $53,000 based on the first $265,000 of compensation (2015)
Unincorporated business can contribute up to 20% of adjusted net profit
SEP IRASEP IRA
Payroll Deduction IRA
401(k)
Non-traditional Profit-sharing plans
Profit-sharing
Safe Harbor 401(k)
SIMPLE IRA
Defined Benefit
Non-qualified Deferred Comp.
Single K PlanSM
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Major Benefits
Contributions are discretionary and may even be skipped
Permits social security integration
Simple to administer
No government reporting
SEP IRASEP IRA
Payroll Deduction IRA
401(k)
Non-traditional Profit-sharing plans
Profit-sharing
Safe Harbor 401(k)
SIMPLE IRA
Defined Benefit
Non-qualified Deferred Comp.
Single K PlanSM
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Considerations
Generally, the same percentage of compensation must be contributed for all participants1
Employees are immediately 100% vested
Part-timers may be eligible for benefits
Tax-deferred employee contributions aren’t allowed
Involves top-heavy testing
SEP IRASEP IRA
Payroll Deduction IRA
401(k)
Non-traditional Profit-sharing plans
Profit-sharing
Safe Harbor 401(k)
SIMPLE IRA
Defined Benefit
Non-qualified Deferred Comp.
Single K PlanSM
1. Generally true for plans that choose to use a non-integrated contribution formula.
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Available to all business owners looking to provide a valuable employee benefit without expensive administrative costs
No set-up costs
No employer contributions
No employer-based administrative fees
Payroll Deduction IRASEP IRA
Payroll Deduction IRA
401(k)
Non-traditional Profit-sharing plans
Profit-sharing
Safe Harbor 401(k)
SIMPLE IRA
Defined Benefit
Non-qualified Deferred Comp.
Single K PlanSM
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Employee Contribution
Employees may contribute up to $5,500 for 2015
In addition, participants age 50 and above can make catch-up contributions equal to $1,000
Can be funded with a Traditional IRA and/or Roth IRA
Payroll Deduction IRASEP IRA
Payroll Deduction IRA
401(k)
Non-traditional Profit-sharing plans
Profit-sharing
Safe Harbor 401(k)
SIMPLE IRA
Defined Benefit
Non-qualified Deferred Comp.
Single K PlanSM
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Major Benefits
Low cost
No administrative fees or expenses
Employees fund their own accounts
Simple to establish and maintain
No testing or government reporting
Can complement any retirement plan
Payroll Deduction IRASEP IRA
Payroll Deduction IRA
401(k)
Non-traditional Profit-sharing plans
Profit-sharing
Safe Harbor 401(k)
SIMPLE IRA
Defined Benefit
Non-qualified Deferred Comp.
Single K PlanSM
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Considerations
Contribution limits are low
Loans are not permitted
Payroll Deduction IRASEP IRA
Payroll Deduction IRA
401(k)
Non-traditional Profit-sharing plans
Profit-sharing
Safe Harbor 401(k)
SIMPLE IRA
Defined Benefit
Non-qualified Deferred Comp.
Single K PlanSM
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Employee Contribution
Participants can contribute up to the lesser of 100% of their compensation or $18,000 for 2015
In addition, participants age 50 and above can make catch-up contributions up to $6,000 for 2015
401(k)SEP IRA
Payroll Deduction IRA
401(k)
Non-traditional Profit-sharing plans
Profit-sharing
Safe Harbor 401(k)
SIMPLE IRA
Defined Benefit
Non-qualified Deferred Comp.
Single K PlanSM
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Employer Contribution
Employer contributions are discretionary
Employers can match salary deferrals based on a variety of formulas
Employers can provide profit sharing contributions based on a variety of formulas
Total employer and employee contributions limited to the lesser of 100% of compensation or $53,000 for 2015
401(k)SEP IRA
Payroll Deduction IRA
401(k)
Non-traditional Profit-sharing plans
Profit-sharing
Safe Harbor 401(k)
SIMPLE IRA
Defined Benefit
Non-qualified Deferred Comp.
Single K PlanSM
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Major Benefits
Employee salary deferrals permitted
Employer match is discretionary
Employer profit sharing is discretionary
May choose vesting schedule
May allow loans and hardship withdrawals
Relatively high contribution limit
401(k)SEP IRA
Payroll Deduction IRA
401(k)
Non-traditional Profit-sharing plans
Profit-sharing
Safe Harbor 401(k)
SIMPLE IRA
Defined Benefit
Non-qualified Deferred Comp.
Single K PlanSM
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Considerations
Subject to nondiscrimination and top heavy testing
Must file Form 5500 and related schedules
More expensive than other retirement options
401(k)SEP IRA
Payroll Deduction IRA
401(k)
Non-traditional Profit-sharing plans
Profit-sharing
Safe Harbor 401(k)
SIMPLE IRA
Defined Benefit
Non-qualified Deferred Comp.
Single K PlanSM
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Solution for clients who like flexibility associated with 401(k) plans but not the cumbersome administration:
• Suitable for employers with low employee participation
• Owners and highly compensated employees that can’t contribute meaningful amounts
Safe Harbor 401(k)SEP IRA
Payroll Deduction IRA
401(k)
Non-traditional Profit-sharing plans
Profit-sharing
Safe Harbor 401(k)
SIMPLE IRA
Defined Benefit
Non-qualified Deferred Comp.
Single K PlanSM
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Employer Contribution
Matching contribution
Dollar-for-dollar up to 3% of employee compensation, plus
50 cents on the dollar for contributions between 3% and 5% of employee compensation
Non-elective contribution option
3% of compensation for each eligible employee, even if they don’t participate in salary deferrals
Safe Harbor 401(k)SEP IRA
Payroll Deduction IRA
401(k)
Non-traditional Profit-sharing plans
Profit-sharing
Safe Harbor 401(k)
SIMPLE IRA
Defined Benefit
Non-qualified Deferred Comp.
Single K PlanSM
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Major Benefits
Nondiscrimination and top-heavy testing automatically satisfied
Highly compensated employees can maximize contributions even if lower paid employees contribute very little
Offers all the same benefits as a traditional 401(k)
Safe Harbor 401(k)SEP IRA
Payroll Deduction IRA
401(k)
Non-traditional Profit-sharing plans
Profit-sharing
Safe Harbor 401(k)
SIMPLE IRA
Defined Benefit
Non-qualified Deferred Comp.
Single K PlanSM
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Considerations
Mandatory safe harbor employer contribution which is 100% immediately vested
Provide adequate notice to employees
Plans must provide 30-day notice
Existing 401(k) plans must amend their plan by the first day of the plan year
Existing Profit-Sharing plans must amend their plan three months prior to the end of the plan year, October 1st
Safe Harbor 401(k)SEP IRA
Payroll Deduction IRA
401(k)
Non-traditional Profit-sharing plans
Profit-sharing
Safe Harbor 401(k)
SIMPLE IRA
Defined Benefit
Non-qualified Deferred Comp.
Single K PlanSM
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SIMPLE IRA Safe Harbor 401(k)
Plan size (eligible employees)
100 or fewer employees
25+ is optimal
Administration Low Low
Testing No Yes
Administration Low High
Employer funding Mandatory Mandatory
Maximum annual employee contribution
Lesser of $12,500 or 100% of compensation (adjusted for inflation)
Lesser of $18,000 or 100% of compensation (adjusted for inflation)
Loans and hardship No Yes
Option to restrict eligibility
Limited Yes
Differences Between a SIMPLE IRA and Safe Harbor 401(k) SEP IRA
Payroll Deduction IRA
401(k)
Non-traditional Profit-sharing plans
Profit-sharing
Safe Harbor 401(k)
SIMPLE IRA
Defined Benefit
Non-qualified Deferred Comp.
Single K PlanSM
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Designed for owner-only businesses
• Owners and immediate family members
• Owners with part-time or seasonal employees who can be excluded from the plan
Businesses can be incorporated (partnerships and corporations) and unincorporated (sole proprietorships)
Single K PlanSMSEP IRA
Payroll Deduction IRA
401(k)
Non-traditional Profit-sharing plans
Profit-sharing
Safe Harbor 401(k)
SIMPLE IRA
Defined Benefit
Non-qualified Deferred Comp.
Single K PlanSM
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Contributions (2015)
Profit-sharing deductible contribution, up to 25% of compensation
Salary deferrals. 100% of employee’s compensation up to $18,000
Catch-up contributions: additional $6,000 in salary deferrals for individuals age 50 and above
Overall limits cannot exceed 100% of compensation or $53,000, based on the first $265,000 of compensation
Single K PlanSMSEP IRA
Payroll Deduction IRA
401(k)
Non-traditional Profit-sharing plans
Profit-sharing
Safe Harbor 401(k)
SIMPLE IRA
Defined Benefit
Non-qualified Deferred Comp.
Single K PlanSM
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Roth 401(k) Feature
Save for retirement through Traditional (pretax) and/or Roth (after-tax) investing
No income limits
Salary deferral contributions only
Contribution limit for both Roth 401(k) and Traditional 401(k) contributions
• $18,000 in 2015, plus
• $5,500 age 50 catch-up
• Contributions may be split between Traditional 401(k) and Roth 401(k) contributions within these limits
Single K PlanSMSEP IRA
Payroll Deduction IRA
401(k)
Non-traditional Profit-sharing plans
Profit-sharing
Safe Harbor 401(k)
SIMPLE IRA
Defined Benefit
Non-qualified Deferred Comp.
Single K PlanSM
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Major Benefits
Employee salary deferrals permitted
High contribution limit
Low cost: No set-up fee or annual administrative charge to employer
Simple to administer
Access to account: Loans and hardship withdrawals
Roth 401(k) feature available
Single K PlanSMSEP IRA
Payroll Deduction IRA
401(k)
Non-traditional Profit-sharing plans
Profit-sharing
Safe Harbor 401(k)
SIMPLE IRA
Defined Benefit
Non-qualified Deferred Comp.
Single K PlanSM
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Considerations
Not available to businesses with employees
Single K PlanSMSEP IRA
Payroll Deduction IRA
401(k)
Non-traditional Profit-sharing plans
Profit-sharing
Safe Harbor 401(k)
SIMPLE IRA
Defined Benefit
Non-qualified Deferred Comp.
Single K PlanSM
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Businesses of all sizes
Individuals with self-employment income, earned on either a full-or part-time basis
Profit-sharingSEP IRA
Payroll Deduction IRA
401(k)
Non-traditional Profit-sharing plans
Profit-sharing
Safe Harbor 401(k)
SIMPLE IRA
Defined Benefit
Non-qualified Deferred Comp.
Single K PlanSM
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Employer contributions
Maximum contribution limited to the lesser of 100% of participant’s annual compensation or $53,000 for 2015
Self-employed individuals can shelter up to 20% of adjusted net profit
Profit-sharingSEP IRA
Payroll Deduction IRA
401(k)
Non-traditional Profit-sharing plans
Profit-sharing
Safe Harbor 401(k)
SIMPLE IRA
Defined Benefit
Non-qualified Deferred Comp.
Single K PlanSM
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Major Benefits
Contributions are discretionary
Relatively high contribution limit
Permits Social Security integration
May exclude part-timers
May choose vesting schedule
May allow loans and hardship withdrawals
Profit-sharingSEP IRA
Payroll Deduction IRA
401(k)
Non-traditional Profit-sharing plans
Profit-sharing
Safe Harbor 401(k)
SIMPLE IRA
Defined Benefit
Non-qualified Deferred Comp.
Single K PlanSM
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Considerations
Generally, the same percentage of compensation must be contributed for all participants1
Tax-deferred employee contributions not allowed
Moderate administration and paperwork
Requires government reporting
Involves top-heavy testing
Profit-sharingSEP IRA
Payroll Deduction IRA
401(k)
Non-traditional Profit-sharing plans
Profit-sharing
Safe Harbor 401(k)
SIMPLE IRA
Defined Benefit
Non-qualified Deferred Comp.
Single K PlanSM
1. Generally true for plans that choose to use a non-integrated contribution formula.
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Age-weighted, New Comparability and Super Comp
Profit-sharing plan with greater flexibility
Testing based on reasonably expected benefits at retirement, not on allocations of contributions to the plan
Allow for larger contributions to older, higher paid owners and employees
Non-traditional Profit-sharing PlansSEP IRA
Payroll Deduction IRA
401(k)
Non-traditional Profit-sharing plans
Profit-sharing
Safe Harbor 401(k)
SIMPLE IRA
Defined Benefit
Non-qualified Deferred Comp.
Single K PlanSM
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Age-weighted
Suitable for owners and principals of small companies who:
• Seek contribution flexibility
• Want larger portion of plan contributions for themselves
• Are older and more highly paid than the rest of the workforce
Non-traditional Profit-sharing PlansSEP IRA
Payroll Deduction IRA
401(k)
Non-traditional Profit-sharing plans
Profit-sharing
Safe Harbor 401(k)
SIMPLE IRA
Defined Benefit
Non-qualified Deferred Comp.
Single K PlanSM
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Age-weighted
Contributions allocation based on following factors:
• Current age
• Retirement age, usually age 65
• Years to retirement
• Present value of dollar at retirement based on an assumed interest rate (6% - 8%)
• Current compensation
Non-traditional Profit-sharing PlansSEP IRA
Payroll Deduction IRA
401(k)
Non-traditional Profit-sharing plans
Profit-sharing
Safe Harbor 401(k)
SIMPLE IRA
Defined Benefit
Non-qualified Deferred Comp.
Single K PlanSM
The rates indicated are hypothetical and are not intended to show the performance of any specific investment for any period of time, or fluctuations in principal value or investment return.
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Age-weighted
Non-discrimination testing recognizes the time value of money
• A dollar invested by younger employees will be worth more at normal retirement age than a dollar similarly invested by an older employee
• Plans designed to provide benefits that will be equally valuable at retirement age must provide a higher contribution for an older worker than for a younger worker
Non-traditional Profit-sharing PlansSEP IRA
Payroll Deduction IRA
401(k)
Non-traditional Profit-sharing plans
Profit-sharing
Safe Harbor 401(k)
SIMPLE IRA
Defined Benefit
Non-qualified Deferred Comp.
Single K PlanSM
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Major Benefits
Contributions for older employees may be considerably higher than those made for younger employees
Employers can contribute up to the lesser of 100% of compensation or $53,000 for 2015
Same flexibility as traditional Profit-sharing plans
Age-weightedSEP IRA
Payroll Deduction IRA
401(k)
Non-traditional Profit-sharing plans
Profit-sharing
Safe Harbor 401(k)
SIMPLE IRA
Defined Benefit
Non-qualified Deferred Comp.
Single K PlanSM
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Considerations
No prototype available
Higher cost of administration
Age-weightedSEP IRA
Payroll Deduction IRA
401(k)
Non-traditional Profit-sharing plans
Profit-sharing
Safe Harbor 401(k)
SIMPLE IRA
Defined Benefit
Non-qualified Deferred Comp.
Single K PlanSM
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New Comparability
Suitable for owners and principals of small companies who:
• Seek contribution flexibility
• Want larger portion of plan contributions for themselves
• Are older than the rest of the workforce
Non-traditional Profit-sharing PlansSEP IRA
Payroll Deduction IRA
401(k)
Non-traditional Profit-sharing plans
Profit-sharing
Safe Harbor 401(k)
SIMPLE IRA
Defined Benefit
Non-qualified Deferred Comp.
Single K PlanSM
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New Comparability
Takes Age-weighted a step further
Uses specific employee classifications–rather than strictly age–to design contribution levels for participants
Participants are divided into two or more classes
Classes based on any reasonable criteria: ownership, job, tenure, age
Non-traditional Profit-sharing PlansSEP IRA
Payroll Deduction IRA
401(k)
Non-traditional Profit-sharing plans
Profit-sharing
Safe Harbor 401(k)
SIMPLE IRA
Defined Benefit
Non-qualified Deferred Comp.
Single K PlanSM
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Major Benefits
Usually very substantial contributions are made for one group (favored group), with much lower contributions for the other employees
Cost of providing benefits to other employees can be remarkably low
Employers can contribute up to the lesser of 100% of compensation or $53,000 for 2015
Same flexibility as traditional Profit-Sharing plans
New ComparabilitySEP IRA
Payroll Deduction IRA
401(k)
Non-traditional Profit-sharing plans
Profit-sharing
Safe Harbor 401(k)
SIMPLE IRA
Defined Benefit
Non-qualified Deferred Comp.
Single K PlanSM
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Considerations
No prototype available
Higher cost of administration
New ComparabilitySEP IRA
Payroll Deduction IRA
401(k)
Non-traditional Profit-sharing plans
Profit-sharing
Safe Harbor 401(k)
SIMPLE IRA
Defined Benefit
Non-qualified Deferred Comp.
Single K PlanSM
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Super Comp
Safe Harbor 401(k) plus New Comparability Profit-sharing plan
Suitable for owners and principals of small companies who:
• Have consistently failed discrimination testing
• Make contributions of 5% or more
• Want to max out contributions for owners and highly compensated employees
• Want a larger portion of plan contributions for themselves
Non-traditional Profit-sharing PlansSEP IRA
Payroll Deduction IRA
401(k)
Non-traditional Profit-sharing plans
Profit-sharing
Safe Harbor 401(k)
SIMPLE IRA
Defined Benefit
Non-qualified Deferred Comp.
Single K PlanSM
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Major Benefits
No 401(k) nondiscrimination testing on Safe Harbor contributions
No top-heavy problems
Maximum salary deferrals for highly compensated employees
Maximum Profit-Sharing allocations for highly compensated employees
Minimum contributions for other employees
Non-traditional Profit-sharing PlansSEP IRA
Payroll Deduction IRA
401(k)
Non-traditional Profit-sharing plans
Profit-sharing
Safe Harbor 401(k)
SIMPLE IRA
Defined Benefit
Non-qualified Deferred Comp.
Single K PlanSM
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Considerations
No prototype available for New Comparability
Mandatory Safe Harbor 401(k) contribution
100% immediate vesting for 401(k) deferrals and Safe Harbor employer contributions
Provide adequate notice to employees
• Plans must provide 30-day notice
• Existing 401(k) plans must amend plan by first day of plan year
• Existing Profit-sharing plans must amend plan three months prior to the end of the plan year, October 1st
Super CompSEP IRA
Payroll Deduction IRA
401(k)
Non-traditional Profit-sharing plans
Profit-sharing
Safe Harbor 401(k)
SIMPLE IRA
Defined Benefit
Non-qualified Deferred Comp.
Single K PlanSM
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Provides specific benefit at retirement
Suitable for:
• Small, high revenue companies and professional groups
• Older business owners who want to accumulate retirement assets in a short time
Defined BenefitSEP IRA
Payroll Deduction IRA
401(k)
Non-traditional Profit-sharing plans
Profit-sharing
Safe Harbor 401(k)
SIMPLE IRA
Defined Benefit
Non-qualified Deferred Comp.
Single K PlanSM
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Major Benefits
No other qualified plan allows for higher contributions than defined benefit plans
Maximum retirement benefit is 100% of compensation up to a maximum of $210,000 a year (2015)
Employees know how much they can expect to receive at retirement
May contribute to a defined contribution plan and still fund a defined benefit plan
Defined BenefitSEP IRA
Payroll Deduction IRA
401(k)
Non-traditional Profit-sharing plans
Profit-sharing
Safe Harbor 401(k)
SIMPLE IRA
Defined Benefit
Non-qualified Deferred Comp.
Single K PlanSM
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Considerations
More expensive to establish and maintain
Quarterly plan contributions are required
Benefits must be paid, regardless of how plan’s investments perform
Defined BenefitSEP IRA
Payroll Deduction IRA
401(k)
Non-traditional Profit-sharing plans
Profit-sharing
Safe Harbor 401(k)
SIMPLE IRA
Defined Benefit
Non-qualified Deferred Comp.
Single K PlanSM
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It Doesn’t Matter Who Provides Your Retirement Plan
One Other Myth:
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The experience and principles that underlie its promises
The quality and range of its investments
The ease, convenience and service inherent in its products
What to Look for in a Plan Provider
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Insist on solid, long-term performance
Do what you say you’re going to do
Embrace a disciplined, collaborative approach to investing
Know the difference between risk and risky
Encourage financial planning and professional advice
Be user friendly
The Right Way to Invest
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Domestic Equity
Global Equity
Global Debt
Alternative
Multi Asset
Domestic Debt
Money Market
Investment Choice
Conservative funds generally carry a lower level of risk but also offer lower rates of return. Aggressive funds generally carry a higher level of risk but have the potential to offer a higher rate of return.
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Regular account statements make it easy to track investment growth
Fund exchange privileges1
24-hour voice response system
Internet capabilities
Toll-free number for our Customer Service Reps
Regular communications highlighting the plan’s value
Education materials that enhance retirement planning and investment skills
Support Services
1. Exchange privileges may be suspended or eliminated at any time without notice.
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Thank You!
Mutual funds are subject to market risk and volatility. Shares may gain or lose value.
Shares of Oppenheimer funds are not deposits or obligations of any bank, are not guaranteed by any bank, are not insured by the FDIC or any other agency, and involve investment risks, including the possible loss of the principal amount invested.
This material is provided for general and educational purposes only, and is not intended to provide legal, tax or investment advice, or for use to avoid penalties that may be imposed under U.S. federal tax laws. Contact your attorney or other advisor regarding your specific legal, investment or tax situation.
Before investing in any of the Oppenheimer funds, investors should carefully consider a fund’s investment objectives, risks, charges and expenses. Fund prospectuses and summary prospectuses contain this and other information about the funds, and may be obtained by asking your financial advisor, visiting oppenheimerfunds.com or calling 1.800.CALL OPP (225.5677). Read prospectuses and summary prospectuses carefully before investing.Oppenheimer funds are distributed by OppenheimerFunds Distributor, Inc.225 Liberty Street, New York, NY 10281-1008© 2015 OppenheimerFunds Distributor, Inc. All rights reserved. RE0000.191.0315 March 19, 2015