Business Banking - Retirement Services
Profit Sharing Plans
|What it is:||A type of defined contribution plan funded with discretionary employer contributions and often tied to company profits.|
|Maximum total plan contribution that the employer may deduct||25% of total eligible payroll (maximum eligible pay per participant is $245,000)|
|Maximum annual allocation to participant’s account||100% of participant’s total pay or $49,000,2 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); however, employer must make “substantial and recurring” contributions.|
1 Plans with a two-years-of-service eligibility requirement must offer immediate 100% vesting.
2 The DC annual additions limit is effective for limitation years ending in the calendar year. The dollar limit is increased by the amount of the applicable catch-up contribution.
Investment products are not deposits or obligations of, or guaranteed by Lake City Bank or any other bank, are not insured or guaranteed by the FDIC or any governmental agency and are subject to investment risks, including possible loss of principal invested. Past performance is not a guarantee of future results.