Participation in a profit-sharing plan
typically must be offered to all employees age 21 or older who worked at least 1,000 hours in a previous year.
There are several factors a company must consider with a profit-sharing plan
In Section I of the paper, we provide an overview of some institutional features of ESOPs and profit-sharing plans
This article describes the major features of today's profit-sharing plans
, based on data on plan provisions from the BLS 1989 Employee Benefits Survey.
Additionally, new funds going into a profit-sharing plan
Based on the principles used to create age-weighted profit-sharing plans
, it is possible to go beyond the age-weighted allocation formula and develop alternatives that better meet the objectives of providing for more senior people.
Once profit-sharing plan
limits were increased to the lesser of 25% or $42,000 (2005 limit under Section 415), more "room" became available under these plans.
To maximize these contributions employers commonly offer "paired" plans, consisting of a money purchase pension plan (MPPP) and a profit-sharing plan
For business entities with a profit-sharing plan
, the plan trustee can be authorized to purchase life insurance with the monies in one owner's or partner's segregated profit-sharing account on another co-owner's life.
Most profit-sharing plans
allocate the corporations contributions only on the basis of compensation.
Other consequences of reclassification include nondiscrimination and coverage requirements in pension and profit-sharing plans
and workers' compensation rules.
Age-weighted profit-sharing plans
allow contributions to be allocated on the basis of both relative compensation and age.