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Profit-Sharing Plans
A defined contribution business retirement plan
Profit-Sharing Plans help employees save money for retirement by investing tax-deductible employer contributions. Any type of business can set up such a plan, including not-for-profit organizations and for-profit sole proprietorships, partnerships and corporations.
Also called "defined contribution plans," Profit-Sharing Plans are somewhat unique in that all contributions are made by the employer, up to 25% of each employee's annual compensation. Contributions may be based on the profitability of the company.
The amount contributed to Profit-Sharing Plans is limited and can vary each plan year. The benefit to the employee depends on plan contributions and the earnings on the investments in the plan.
Employers have some flexibility in creating vesting schedules. Depending on the schedule selected, individuals may or may not have the right to receive the entire balance of their plan upon distribution.
For more information, contact an Extraco Relationship Manager by e-mail, or call 866-EXTRACO toll-free.
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