DBIllustration o45-40-40-45-45-50

DBIllustrationBank

Owner Age(s): 45
Employee Ages: 40, 40, 45, 45, 50
Year: 2007


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3 Plan Comparison Traditional
Defined Benefit Plan
Cash Balance Plan Cross-Tested
Cash Balance Plan +
Profit Sharing Plan
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Defined Benefit Plan Cost of owner(s) $99,512 $93,596 $93,596
Owners' % of plan cost 55.6% 57.8% see Owners' % of
Grand Total below
401(k) Plan
(includes
Profit Sharing)
optional/required optional optional required
Additional benefit
to owner(s)
(includes owners'
401(k) deferral)
$29,000 $29,000 $15,500
Combined Plans Total for owner(s) $128,512 $122,596 $109,096
Owners' % of Grand Total 58.1% 60.1% 70.3%
Administrative expense: high twice as high three times as high
Overall Grade*: F F C
Comments:


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*Note that even poorly graded plans may be appropriate in certain situations, such as for lower benefit levels, or if the employee total compensation package is negotiable.