The following items will be discussed during your onboarding call:

We urge clients to get their investment accounts open immediately. Depending on which custodian you use, the process can take a couple weeks. We have relationships with most custodians so let us know if you need some help.

Charles Schwab: https://emparion.com/setting-up-cash-balance-plan-at-charles-schwab/

Fidelity: https://emparion.com/setting-up-a-cash-balance-plan-at-fidelity/

Vanguard: https://emparion.com/how-to-set-up-your-defined-benefit-plan-account-with-vanguard/

Don’t forget that these plans are permanent and annual funding is generally not elective. You will be provided a funding range each year. But if your situation changes and you don’t have the ability to fund your plan please reach out to us ASAP.

Please be advised that when your combined 401k balance and cash balance plan balance exceeds $250,000 you are required to file form 5500 for each plan.

We will follow up in January with a list of a couple items we will need to finalize your funding. This is normally just your W2s (if S-Corp or C-Corp) or your business profit (if a sole proprietor).

As you are aware, we are not your financial advisor or tax firm. We merely handle the compliance for your defined benefit plan. Make sure investment questions and tax questions are directed to those folks.

You were charged an upfront fee for your plan that was based on plan design. However, your plan has annual administration fees. These fees are charged when we finalize your annual administration usually in April/May.

Many financial advisors and CPAs are not aware of how defined benefit plans work. Please communicate the plan to them and forward over plan documents as necessary.

Make sure that they reach out to us if they have any questions or concerns.

Please remember that any illustrations we provided you with was just a funding estimate. We will need to confirm your numbers (W2s and/or business income) before we can give you final numbers.

One big advantage of cash balance plans is that they can be funded up until the date the tax return is filed (including extensions). This would allow you to take a tax deduction on the prior year tax return.

Your defined benefit plan (or cash balance plan) is a separate legal entity from your 401k plan. Accordingly, you should have a separate investment account for each.

When we give you the final contributions, make sure that you deposit the funds in the proper account. If funds get co-mingled or deposited in the wrong account, they will need to be corrected and it could possibly lead to adverse tax consequences.