Direct Recognition Variable Investment plan (VIP) vs. Cash balance plan

Defined Benefit pension plans are not created equal

Cash balance plans and other defined benefit (DB) plans offer successful business owners opportunities to save in taxes and create retirement income streams for plan participants. However, cash balance plans have limitations and risks that VIPs don’t have. There is a way to avoid being trapped by cash balance plan limitations; by terminating a cash balance plan and starting up a VIP, participants can gain access to their investments before retirement age and capture the opportunity to accumulate even more. Our business-smart solution for mitigating plan sponsor liabilities, putting plan assets under participant control and continuing tax-deductible contributions.

See for yourself: Cash Balance plan limitations & the VIP difference

Suitable profile for VIP retirement plans

• Companies with partners/shareholders/senior management earning more than $400,000 per annum and looking to contribute up to $300,000/yr. to 401(k), profit-sharing and/or VIP plan
• Firms seeking increased contribution and investment flexibility, administrative simplicity and mitigation of liabilities related to investment performance