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JaaFal and its affiliates provides comprehensive retirement guidance tailored to our clients' needs. We've created a robust menu of opportunities and there are virtually no limitations on how a plan sponsor can choose to partner with us.

Find out about the variety of plan types available:

JF(k) Profit Sharing Plan
Age-Weighted Profit Sharing Plan
Money Purchase Plan
New Comparability Money Purchase Plan
New Comparability Profit Sharing Plan
Profit Sharing Plan
Simplified Employee Pension (SEP) Plan
Safe-Harbor JF(k) / Profit Sharing Plan
SIMPLE Individual Retirement Account (IRA) Plan
403(b) Tax-Deferred Annuity Plan
457 Plan
Defined Benefit Plan
Non-Qualified Deferred Compensation Plan

JF(k) Profit Sharing Plan

Allows employees to defer a portion of current compensation
Employee retirement plan contributions, up to $11,000 per year
Employees age 50 or over are allowed a "catch up contribution" of $1,000 in 2002 (increasing $1,000 per year from 2003 to 2006)
Immediate tax deferral on employee's contributions
Accumulated earnings also tax deferred
Employers may choose to match contributions as a percentage of employee deferrals
Employers may also choose to add a profit sharing contribution

Advantages	Disadvantages
Employees contribute toward their own retirement savings Good tool for attracting and retaining employees, particularly with matching employer contributions	Additional nondiscrimination testing required each year (unless a Safe-Harbor JF(k) Plan) Added costs for recordkeeping and government reporting

Age-Weighted Profit Sharing Plan

Accounts for employee age and compensation in determining share of employer contribution
Older employees often receive a greater share of contributions than younger employees

Advantages	Disadvantages
Employers can substantially increase contributions for older workers who are often key employees Employers can minimize contributions for all other employees	May be difficult to communicate plan parameters to employees All older employees will also benefit from contribution allocation formulas May be increased administrative costs

Money Purchase Plan

Unique defined contribution plan
Employers may deduct contributions up to 25% of compensation for eligible employees
Contribution percentages must be stated in the plan documents
Contributions must be made each year
Plan contributions can be allocated using integration with Social Security or New Comparability methods

Advantages	Disadvantages
Excellent tool for attracting and retaining employees Maximizes amount that can be placed into a participant's retirement account	Employers must make annual contributions as stated in the document, even if employers cannot afford to do so

New Comparability Money Purchase Plan

Also referred to as a Cross-Tested plan
Employer required to make contributions as stated in the plan documents
Contributions can be up to 25% of compensation for eligible employees
Allows employers to divide employees into several groups and allocate different rates/contributions to each group
Contributions per group are tested for nondiscrimination using a cross-tested method that converts contributions to future benefits

Advantages	Disadvantages
Employers can maximize contributions to key employees and owners Employers can minimize contributions for all other employee groups	Employers must fund all contributions according to percentage stated in the plan documents May be difficult to communicate plan parameters to employees Higher set-up and ongoing administrative costs

New Comparability Profit Sharing Plan

Also referred to as a Cross-Tested plan
Employer's contribution is discretionary each year
Up to 25% of compensation for eligible employees
Allows the employer to divide employees into several groups and allocate different rates of contributions to each group
Contributions per group are tested for nondiscrimination using a cross-tested method that converts contributions to annualized future benefits
Allows the allocation of employer contributions as a percentage of salary to vary greatly by group

Advantages	Disadvantages
Employers can maximize contributions to key employees and owners Employers can minimize contributions to all other employees	Employers must fund all contributions unless a JF(k) component is added to the plan May be difficult to communicate plan parameters to employees Higher set-up and ongoing administrative costs

Profit Sharing Plan

Employer contributions may vary each year
Contributions at plan sponsor discretion
Typically, contributions are made when company shows a profit
Contributions may also be allocated using integration with Social Security methods.
Maximum deductible contribution is 25% of compensation for all eligible employees
Contributions usually allocated on a ratio of eligible participant compensation versus total participants
Note: A profit sharing plan that permits employees to make pre-tax contributions is a JF(k) Plan (see also the description of a JF(k) Profit Sharing Plan and a Safe Harbor JF(k) Profit Sharing Plan).

Advantages	Disadvantages
Employers may determine contribution levels in any given year Employer can use a vesting schedule Employer may exclude groups of employees as long as coverage rules are satisfied Employer may control employee access to contributions	Employers bear the responsibility for all plan contributions

Simplified Employee Pension Plan (SEP)

Permits contributions to vary each year
Contributions are at the employer's discretion
Maximum deductible contribution is 25% of compensation for all eligible employees
Contributions are typically made in years that the company shows a profit
Contributions usually allocated based on the ratio of eligible participant compensation versus total compensation for all participants
Contributions may also be allocated using integration with Social Security methods
Employer makes contributions directly to an Individual Retirement Account (IRA) established for each eligible employee
Employee retirement plan contributions up to $11,000
Employees age 50 or over are allowed a "catch up contribution" of $1,000 in 2002 (increasing $1,000 per year from 2003 to 2006)

Advantages	Disadvantages
Employers can establish and contribute to employee retirement plans with limited administrative responsibility No reporting requirements No nondiscrimination testing requirements	Employees are always 100% vested Employees can access IRA funds at any time Generally not a good tool to attract and retain employees Excise tax of 10% may be assessed for early withdrawals Loans are not available

Safe-Harbor JF(k) Profit Sharing Plan

Allows employees to defer current compensation in exchange for a retirement plan contribution, up to $11,000 per year
Immediate tax deferral on employee contributions and accumulated earnings
Safe harbor match contribution is 100% of the first 3% of compensation deferred, plus 50% of the next 2% of compensation deferred
Employer can make a 3% contribution to all eligible employees in lieu of matching contributions
Plan is automatically considered to be nondiscriminatory with regard to employee pre-tax and employer matching or non-elective contributions made to the Plan

Advantages	Disadvantages
Employers can provide a program that features both employer and employee contributions No annual nondiscrimination tests Excellent tool for attracting and retaining employees	Difficult for employees to maximize savings due to restrictions on employer contributions Required matching or non-elective employer contributions are 100% vested Annual notice requirement

SIMPLE Individual Retirement Account (IRA) Plan

Allows employers with 100 or fewer employees to establish a retirement program
An Individual Retirement Account (IRA) is established for each employee
Employees may make pre-tax salary deferral contributions, up to $7,000 per year or 100% of annual compensation
Employees age 50 or over are allowed a "catch up contribution" of $500 in 2002
Employer must make either a matching contribution for employees who defer compensation, or a non-elective contribution to all eligible employees
Matching contributions must be 100% of employee's deferral, up to 3% of pay Non-elective contribution must be 2% of pay
All employees eligible to participate if: 1) they receive at least $5,000 pay during any two preceding years and 2) they are expected to receive at least $5,000 during the current year
Note: Employers with other types of retirement plans cannot also establish a SIMPLE IRA Plan

Advantages	Disadvantages
Requires minimal plan administration Allows lower income employees to maximize retirement savings	Employees are always 100% vested Employees can access IRA funds at any time Not a good tool to attract, retain employees Excise tax of 25% may be assessed for early withdrawals Loans are not available

403(b) Tax-Deferred Annuity Plan

May only be sponsored by a tax-exempt 501(c)(3) organization, hospital, educational institution or church
Allows employees to defer a portion of current compensation
Employee retirement plan contributions, up to $11,000 per year
Immediate tax deferral on employee contributions and accumulated earnings
Plans may be established as voluntary payroll savings plans or formally sponsored retirement programs (ERISA qualified plans)
Invested in either annuities or mutual funds
Employer may match a percentage of employee contributions
Eligible organizations may also sponsor a JF(k) plan
Employees age 50 or older may make a catch up contribution

Advantages	Disadvantages
Employees contribute toward their own retirement savings Employers not eligible to set up a JF(k), can design their 403(b) plan to mirror a JF(k) plan structure Programs set-up as Voluntary Payroll Savings Plans do not require non-discrimination testing Good tool for attracting and retaining employees especially with matching employer contributions	Plans established as formally sponsored retirement programs under ERISA will require non-discrimination testing Additional compliance and reporting requirements if employer matches employee contributions Employer cannot exclude any employee groups

457 Plan

Exclusive plan type for State or Local government entities
May be available to tax exempt organizations (except churches) but only designed as either an excess benefit plan or a top-hat plan
Allows employees to defer a portion of current compensation in exchange for retirement plan contributions, up to $11,000 per year
Allows immediate tax deferral on employee contributions and accumulated earnings
May allow for employer matching contributions
May allow for employer discretionary, non-elective contributions
Note: State or Local government entities may not sponsor a JF(k) plan unless adopted before May 6, 1986

Advantages	Disadvantages
Employees contribute toward their own retirement savings Employees contribute on a pre-tax basis Additional "catch up" provision for participants within three years prior to retirement	Generally low participation levels The $11,000 limit applies to all types of contributions (employer and employee)

Defined Benefit Plan

Qualified plan that provides a definitive benefit amount at retirement
Benefit is typically stated as a monthly payment based on employee compensation and length of employment
Benefit is payable at the plan's normal retirement age, typically age 65
Benefits can also be payable at an earlier age, on a reduced amount basis
Older owner with younger employees can maximize their own contributions
Contributions for employees can be kept to a minimum

Advantages	Disadvantages
Employers with good, consistent cash flow can provide guaranteed retirement benefits for employees Employer may contribute the greatest amount in the shortest period of time if employees have not saved enough for retirement Can be offered in addition to defined contribution program in order to maximize employee benefits	More expensive to administer than defined contribution plans Higher administrative costs: includes actuarial fees and Pension Benefit Guaranty Corporation insurance premiums

Non-Qualified Deferred Compensation Plan

Generally established for a select group of executives or key employees
Represents a promise to compensate employees for services currently rendered, but with actual payment for services to be made in the future
Can also be used to provide benefits that are capped by statutory limitations on the amount of compensation or benefits available under qualified plans
Contributions are generally not deductible by the corporation until the employee receives the benefits
Contributions typically made in stocks, mutual funds, insurance products or other securities

Advantages	Disadvantages
Corporations can provide key executives with benefits while excluding the balance of the workforce Allows contributions to exceed legal limits of qualified plans	Can be expensive to fund and administer No tax deduction may be taken until benefits are paid or available Assets are the property of the corporation and may be subject to creditor claims