If you are looking to reduce your corporate income taxes and reward your employees, a qualified retirement plan is one of the best tax shelters available. Your company is allowed a current tax deduction for its contributions to the plan, the employee pays no tax on the money contributed until a distribution is made, and the earnings from investments accumulate tax-free. Other reasons for adopting a retirement program are to attract employees, reduce employee turnover, increase employee incentive, and accumulate funds for retirement.

Our staff at First Banking Center will help you design a retirement program that fits your company's needs, assist in implementation and on-going administration of the plan. We will educate and communicate to your employees the features of the plan, investments choices, why retirement planning is an important part of their lives, and provide assistance in helping employees meet their retirement goals.

The following are just a few retirement programs that First Banking Center has to offer.

SEP IRA
A Simplified Employee Pension (SEP) Individual Retirement Account is established for an employee to which the employer makes direct tax-deductible contributions. This type of vehicle may be suitable for self-employed individuals or small business owners with variable earnings who seek a retirement plan with minimal IRS filings, paperwork, and low cost. A SEP is easy to establish and maintain. The employer has flexibility in the contribution rate annually and has no commitment to contribute for any future years. The employer has until its tax filing deadline plus extension to setup and contribute for prior year deductibility.

401(k)
A 401(k) is a qualified profit sharing plan that contains a cash or deferred arrangement. It offers an employee the opportunity to participate in saving for retirement on a pre-tax basis that will reduce the employee's current taxable income. You, as an employer, have the flexibility within ERISA guidelines in determining when an employee is eligible to participate in the plan, choosing an investment mix from a list of funds available, determining the vesting schedule of employer contributions, and determining when participants can take distributions from the plan. This type of vehicle may be suitable for small to large companies who want to offer a salary reduction plan with a maximum number of options to their employees. The plan must be adopted by employer's year-end and employer contributions must be made by the employer's tax filing deadline, plus extensions.

SIMPLE IRA
A Savings Incentive Match for Employees (SIMPLE) retirement plan is for a small business. Companies with 100 or fewer employees who earned $5,000 or more in compensation for the preceding calendar year may adopt a SIMPLE. This type of plan may be suitable for a company seeking an alternative to a 401(k) plan, with fewer administrative requirements and low cost. The SIMPLE allows employees to make elective contributions out of their compensation up to the annual contribution limit. The employer must match deferrals dollar for dollar up to 3% of compensation (can be lowered to 1% in two out of five years), or an employer can make a 2% nonelective contribution for each eligible employee.