Understanding a Defined Benefit Plan

For educational and informational purposes only, This is not a recommendation to buy, sell or invest. Please consult your advisor and tax consultant.

Today’s economy is buoyant and we offer a safe harbor for employees to save for their retirement. Defined Benefit Plans are part of the 401 Internal Revenue Code Section. Contributions made by employers under these plans are tax-deductible while employees do not pay tax on earnings and contributions until the assets are dispersed. These plans are best suited for established and or highly profitable businesses and older employees due to the plans’ higher tax deductions and considerable retirement benefits payout.

Guarantees are reliant upon the claims-paying capacity of the guarantor.


We specialize in the 403(b)/457(b) market offering traditional fixed and indexed annuities with Guaranteed Lifetime Income Riders (GLIR).

Guarantees are based on the claims-paying ability of the issuing company and are an elective benefit subject to premium charges. Early withdrawals are subject to penalties if withdrawn before age 59 ½. A 10% federal penalty is subject to apply.

All withdrawals from an allowance obtained with non-qualified money may be taxed as regular income to the degree of a gain in the policy.


412(e)3 is a Defined Benefit Plan that offers guaranteed retirement benefits which may include insured death benefits. While yearly maximum contributions and tax deductions will be greater, the 412(e)3 offers considerable retirement benefits without marketplace risks.

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