| In 2006, one of Los Angeles' largest law firms needed to provide a program for additional tax-deferral for the dozens of partners. The 401(k) Profit Sharing contributions of $45,000 were just not enough.
Kravitz designed a Cash Balance plan that will allow the firm to contribute approximately $7,000,000 into the plan, with many of the partners receiving their age-weighted maximum in the plan. The guaranteed interest rate for this plan is 5.5% based on the new regulations in the 2006 Pension Protection Act.
The firm is also delighted to continue to offer excellent benefits for employees, especially their enhanced benefit package for employees with more than 20 years of service.
Retirement Plan Illustration
Year Ending December 21, 2009
|
|
401(k) |
Profit Sharing |
Cash Balance |
Total |
| 1 |
$20,500 |
$29,500 |
$150,000 |
$200,000 |
| 2 |
$20,500 |
$29,500 |
$120,000 |
$170,000 |
| : |
: |
: |
: |
: |
| 143 |
$20,500 |
$29,500 |
$103,000 |
$153,000 |
| Subtotal |
$881,500 |
$1,268,500 |
$4,515,000 |
$6,665,000 |
|
|
|
|
401(k) |
Profit Sharing |
Cash Balance |
Total |
| 1 |
$15,500 |
$29,500 |
$98,000 |
$143,000 |
| 2 |
$15,500 |
$29,500 |
$85,000 |
$130,000 |
| : |
: |
: |
: |
: |
| 247 |
$15,500 |
$29,500 |
$40,000 |
$85,000 |
| Subtotal |
$728,500 |
$728,500 |
$2,444,000 |
$3,901,000 |
|
|
|
|
$1,610,000 |
$1,997,000 |
$6,959,000 |
$10,566,000 |
| 143 Associate |
n/a* |
$0 |
$0 |
$0 |
| 247 Other Employees |
n/a* |
$1,018,875 |
– |
$1,018,875 |
| Total |
$1,610,000 |
$3,015,875 |
$6,959,000 |
$11,584,875 |
|
|
Percent to Partners: 88%
*This illustration shows only the cost to the firm.
Staff employees and associate attorneys pay for their own 401(k) contributions.
|
