Advantages of a Defined Benefit Plan
There are several reasons why a defined benefit plan can be a good solution for you and your employees.
Advantages for You
You benefit because a defined benefit plan:
- Lets you deduct your contributions from taxes as a business expense.
- Helps recruit and keep quality employees.
- Lets you recognize past service for you and your employees.
- Invests in long-term employees rather than short-term employees.
- Can lower your funding levels during periods of higher investment return.
- Reduces your need for employee investment education.
Advantages for Your Employees
Plan members benefit because a defined benefit plan allows them to:
- Receive a benefit set by the plan.
- Save for retirement without making any investment decisions or assuming any investment risk.
