Defined Benefit Plans
ERISA Investment Fiduciary Fees
Plan fees will be determined based on the type of retirement plan offered to your employees. Below is a fee breakdown for Defined Benefit Only Plans (e.g. Cash Balance Plans).
FPLCM – Annual & One-Time Setup Fees
Our fee structure depends on the type of ERISA Investment Fiduciary Services we will be providing for your retirement plan.
| DEFINED BENEFIT/CASH BALANCE PLANS – ERISA 3(38) SERVICES | |||
|---|---|---|---|
| Plan Assets | Fee Rate | Min Annual Fee | Max Annual Fee |
| Between $0 – $5M | 0.70% | $2,500 | $5,000 |
| Between $5M – $10M | 0.70% | N/A | $10,000 |
| Between $10M – $15M | 0.70% | N/A | $15,000 |
| Greater than $15M | 0.70% | N/A | $20,000 |
| One-Time Setup Fee is $2,500 | |||
Recordkeeper, Third-Party Administrator, and Custodian Fees
Recordkeeping, Third-Party Administrator, and Custodian fees are in addition to our annual ERISA Fiduciary fee.
There is no requirement to use a dedicated Recordkeeper for a Defined Benefit or Cash Balance Plan. Recordkeeping services can be utilized as an add-on service through the Third-Party Administrator. We have partnered with Farmer & Betts to provide TPA services.
Farmer & Betts – Annual & One-Time Setup Fees
| TPA Service Provided | Annual Fees | One-Time Setup Fee |
|---|---|---|
| 401(k) Profit Sharing Plan with a Defined Benefit Plan | $3,950 + $50/PPT | $2,750 |
| 401(k) Profit Sharing Plan with Cash Balance Plan | $4,450 + $50/PPT | $2,750 |
| One-Time Setup Fee Waived for Existing Plans | ||
Up to $16,500 in Tax Credits for Small Business Retirement Plans
The SECURE Act, passed in 2020, has been one of the most comprehensive updates to retirement plans in more than a decade. One of the major benefits of the bill is the Small Business Tax Credits.
Companies with up to 100 employees can claim a tax credit to offset startup costs associated with establishing a new 401(k) plan. Companies can get a tax credit of up to $5,000 per year for the first three years, with a maximum total credit of up to $15,000. Startup costs include:
- Annual and setup fees for Third-Party Administrator services
- Annual and setup fees for ERISA Fiduciary services
- Annual and setup fees for Recordkeeping services
Furthermore, there is also a $500 tax credit available for plans that add an automatic enrollment feature to a new or existing retirement plan for participants. This credit is also available for the first three years the feature is effective, with a maximum total credit of up to $1,500. This means that the total maximum eligible tax credit for establishing a 401(k) plan is $16,500 for the three years.
To learn more details about the IRS tax credits, click here.
