Retirement Services

Profit Sharing Plans

Often tied to company profits, Profit Sharing Plans are a defined contribution plan funded with discretionary employer contributions.

  • Advantages
    • Flexible contributions
    • Encourages employees to invest in your business’ success
  • Eligibility
    • All taxable businesses, government entities and tax-exempt organizations may establish a Profit Sharing Plan
    • Any employee with 1,000 hours of service within one year1 and who is age 21 or older must be covered; exclusions are permitted for certain employees
  • Maximum total plan contribution that the employer may deduct

    25% of total eligible payroll (maximum eligible pay per participant is $275,000)

  • Maximum annual allocation to participant’s account

    100% of participant’s total pay or $55,0002, whichever is less

  • Maximum annual participant deferral (cannot exceed 100% of pay)

    No participant contributions allowed

  • Required employer contribution

    Flexible contribution amount allowed each year (preset amount not required)

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