Question

a Straight Defined Benefit Plans, a Target Benefit Plans, an ESOP, a SIMPLE, a SEP, a...

a Straight Defined Benefit Plans, a Target Benefit Plans, an ESOP, a SIMPLE, a SEP, a 401(k), a 403(b), a Profit Sharing Plan, or a Money Purchase Pension Plan.

An optometrist has a private practice in a medium-sized town. They specialize in unique eyewear. They are the only place within 75 miles where a consumer can find Lacoste and Gucci frames. This doctor is doing well for himself. He has decided that he wants to provide a retirement benefit for all of his employees. He has three full-time employees and four part-time employees that fill in during either busy or evening shifts. He also wants the contributions to have a discretionary nature on the chance that either competition or consumer tastes change his profitability. His employees have been very loyal workers and does not have any desire to use vesting schedules to enhance employee retention. However, the doctor has one employee who has a significant problem with overspending. He does not want to encourage this trend and therefore does not want to offer plan loans. What plan type is best for this potential client?

What kind of retirement plan would be best?

Homework Answers

Answer #1

A profit sharing plan along with 401K plan sounds perfect for this type of potential client.

Here employees with profit sharing plans do not make their own contributions, But the client can offer a 401(k), along with a profit-sharing plan. If the client doesn't want any vesting period for the employees retention and also wants the contributions to have a discretionary nature on the chance that either competition or consumer tastes change his profitability then profit sharing plan with 401 k is the best option as 401k does not have any vesting period. Further if client does not make profits then he has the discretion not to contribute in the retirement fund for that particular period and employee can continue with 401k. Further one of his employees like to overspend and he does not want to encourage such thing then plan loans on profit sharing plan is not possible.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Javier recently graduated and started his career with DNL Inc. DNL provides a defined benefit plan...
Javier recently graduated and started his career with DNL Inc. DNL provides a defined benefit plan to all employees. According to the terms of the plan, for each full year of service working for the employer, employees receive a benefit of 1.5 percent of their average salary over their highest three years of compensation from the company. Employees may accrue only 30 years of benefit under the plan (45 percent). Determine Javier’s annual benefit on retirement, before taxes, under each...
2. Cindy Lou Woo established a qualified defined benefit pension plan for her employees at Christmas...
2. Cindy Lou Woo established a qualified defined benefit pension plan for her employees at Christmas Cheer Industries (CCI). The plan contained the following feature: • It is a unit benefit plan based on the final three years of compensation; units of 1 percent accrue for each year of service. • In order to participate in the plan, employees must satisfy age and service requirements that are identical to the requirements found in the law. • Cliff vesting is utilized...
In this assignment, you will be given several different scenarios. You will need to type on...
In this assignment, you will be given several different scenarios. You will need to type on a separate sheet of paper which plan type you think would be best for each situation and why you have chosen that plan type. Each scenario will be worth 1 point. There are nine scenarios, so you will receive 1 extra point for turning the assignment in on time. Each scenario will have only one correct answer and you may not use the same...
In this assignment, you will be given several different scenarios. You will need to type on...
In this assignment, you will be given several different scenarios. You will need to type on a separate sheet of paper which plan type you think would be best for each situation and why you have chosen that plan type. Each scenario will be worth 1 point. There are nine scenarios, so you will receive 1 extra point for turning the assignment in on time. Each scenario will have only one correct answer and you may not use the same...
You have been hired as a benefit consultant by Jean Honore, the owner of Splish Angels....
You have been hired as a benefit consultant by Jean Honore, the owner of Splish Angels. She wants to establish a retirement plan for herself and her three employees. Jean has provided the following information. The retirement plan is to be based upon annual salary for the last year before retirement and is to provide 50% of Jean’s last-year annual salary and 40% of the last-year annual salary for each employee. The plan will make annual payments at the beginning...
The importance of tuition reimbursement as an employee benefit can’t be ignored. In a recent State...
The importance of tuition reimbursement as an employee benefit can’t be ignored. In a recent State of the American Workplace survey report, Gallup found that 45% of Millennials say they would change their jobs for tuition reimbursement benefits, and 65% of HR decision-makers say that failing to attract and/or retain Millennial or Gen Z employees could have a negative impact on the business. You are the HR manager for a medium-sized company that wants to implement such a program, and...
Question 1 (1 point) Ray died this year at age 73, and his wife, Mary, age...
Question 1 (1 point) Ray died this year at age 73, and his wife, Mary, age 55, is the designated beneficiary on his Roth IRA. Ray's Roth IRA was established 3 years ago. Which of the following statements is(are) CORRECT? I Ray was not subject to required minimum distributions from his Roth IRA during his lifetime. II If Mary chooses to distribute the entire balance of the Roth IRA this year, the distribution may be subject to both regular income...
Subject: Human Resource Management Main question: Which benefit plans would you choose, and which wouldn't you...
Subject: Human Resource Management Main question: Which benefit plans would you choose, and which wouldn't you choose and give reasons why you would or would not want a benefit that were used in making the benefit selections (specially at at entry level making $30000). PROCEDURES: Assume that you recently graduated from college and are just starting a new job at a large firm. You will be receiving a starting net pay (net of all taxes and mandatory deductions) of $30,000....
Hi! Below is the case study and I want to make sure I'm on the right...
Hi! Below is the case study and I want to make sure I'm on the right track. I bolded the questions I'm interested in (1-5). Looking for people who are familiar with the DSM-5/abnormal psychology and able to answer all questions completely. Thank you! Questions: 1. Diagnosis; what is the evidence for it? 2. Treatment; typical treatment used for this diagnosis AND most effective treatment. IF the person is in treatment, what should we target first in terms of symptoms?...
Brenda graduated with her B.A. in business administration and was surprised when she was told she...
Brenda graduated with her B.A. in business administration and was surprised when she was told she was unqualified to run the human resources department in several companies without work experience. Now she must decide what to do as a stepping stone to reach her goal. Which option best fits Brenda's goals? Take a lower level job in a human resources department for experience Move to a bigger city where there is a greater need for human resources directors Go to...