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profit sharing
(redirected from Profit-Sharing Plans)

   Also found in: Dictionary/thesaurus, Financial, Encyclopedia, Wikipedia 0.01 sec.
profit sharing,
n a mechanism for funding a retirement plan for employees or members of a professional association. Members are eligible for a percentage of the net income based on predetermined formulae. Such plans, properly executed, are legal and ethical and are to be differentiated from fee splitting, which is illegal and unethical, in which a referring professional shares in the fee-for-service income of another professional.

profit
the amount by which income exceeds expenditure.

profit sharing
profit sharing between a professional and a lay person is illegal in most countries because it is considered to be improper for a nonveterinarian to have any authority over the quality and style of the work of a professional person.


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Contributions to profit-sharing plans, on the other hand, are discretionary and can be based on whether the plan sponsors can afford to make plan contributions.
Recent changes to the rules governing qualified plans, only some of which are summarized here, will require employers sponsoring pension or profit-sharing plans to take action before the current plan year is over.
Fourth, profit-sharing plans that lead to no behavioral changes - that do not directly affect certain practices that waste money or increase productivity - merely degenerate into an uncertain bonus at year's end, but stimulate no extra effort on the part of the work force.
 
 
 
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