Offering retirement plans is an important way for companies to provide financial security for their employees, while also attracting and retaining talent, providing tax benefits, improving productivity and so much more.

There are two types of retirement plans, Defined Contributions and Defined Benefits. The defined contribution plans allow employees and/or employers the ability to make contributions and typically have the employee invest those funds for retirement within the plan. Participants in this plan will have access to these funds when they have a distributable event. The funds in this plan will be composed of employee and/or employer contributions plus investment gains or losses. Defined benefit plans are pension plans that promise the employee a replacement of income once they retire. The employer makes contributions on behalf of the employee and manages the investment. The employer contributions will need to be based on actuarial assumptions. An employer can sponsor one or both plans. Defined contributions plans are discretionary so contributions can change from year to year both by the employees and employer. Defined benefit plans are mandatory contributions since they follow an actuarial assumption of growth and income replacement.

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