DBIllustration o55-35

DBIllustrationBank

Owner Age(s): 55
Employee Ages: 35
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) $252,657 $153,926 $153,926
Owners' % of plan cost 96.5% 94.6% 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)
$34,000 $34,000 $32,600
Combined Plans Total for owner(s) $286,657 $187,926 $186,526
Owners' % of Grand Total 96.2% 94.5% 98.1%
Administrative expense: high twice as high three times as high
Overall Grade*: A F F
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.