Profit-Sharing Plans
A defined contribution retirement plan for owners and employees

Profit-Sharing Plans allow employees to 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 15% of each employee's annual compensation. Contributions are not based on the profitability of the company, but on the amount of each participant's compensation.

The amount contributed to Profit-Sharing Plans is limited and can vary each plan year. The benefit depends on plan contributions and the interest earned by 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 at initial distribution.

For more information, contact an Extraco Relationship Manager by e-mail, or call 866-EXTRACO toll-free.

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