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A professional services firm with 150 partners, 100 associates, and 250 staff sponsored a traditional 401(k)/Profit Sharing Plan that limited partner contributions to $77,500. Many partners sought to defer more, but the existing plan structure also excluded associates from matching and profit sharing, while staff benefit costs hovered around 10% of compensation.
The firm aimed to increase partner contribution limits without raising overall staff costs, while offering flexible, targeted benefits to different partner groups.
Following a strategic retirement plan assessment, a custom solution was developed that introduced a flexible, market-based cash balance plan alongside refinements to the existing 401(k)/Profit Sharing Plan. The custom approach also sought to enable increased levels of deferrals targeted to select groups (e.g., equity partners), and reduce staff benefit costs to as low as 7.5% of compensation.
Key outcomes included:
Partners can now defer up to $370,000 more annually, a nearly four times increase in qualified retirement savings
Staff benefit costs were reduced by up to 25%, from 10% down to 7.5% of compensation
Delivered a flexible, targeted benefit structure that addressed partner concerns and strengthened recruitment and retention without imposing additional financial risks on the firm
By innovating its retirement benefits, the firm successfully balanced the needs of partners and staff while boosting savings opportunities and improving cost efficiency.
Whether you want to reward key executives, reduce tax exposure, or boost retention with long-term wealth-building benefits, a cash balance plan can help. Reach out to our team to request your free cash balance illustration today.