This is the second in a two-part series about deductible contribution limits to qualified retirement plans.  The first part last week covered the limits to defined contribution plans. 

The tax-deductibility of qualified retirement plan contributions is a huge incentive for employers to sponsor these arrangements.  As we noted last week, there are limits to how much retirement plan contribution an employer may deduct in a given tax year.  The limit depends on whether the plan(s) involved are defined contribution (DC), defined benefit (DB), or a combination of DB and DC plans.  Today, we will look at DB plans and DB/DC combos.

Deductible Limits for Defined Benefit and Combo Plans

This is the first in a two-part series about deductible contribution limits to qualified retirement plans.  The second part next week will cover arrangements that include defined benefit plans. 

Contributions made by a business to a qualified retirement plan are generally tax-deductible.  If the contributions were not tax-deductible, it is likely that fewer businesses would offer a retirement plan, instead paying employees higher wages and letting them fend for themselves for retirement saving. 

Deductible Employer Contribution Limits in 401(k)s and Other Defined Contribution Plans

As both a career professional in the retirement plan field and a citizen observer reading media coverage about 401(k) plan sponsors having to defend themselves from an onslaught of “excessive fee” litigation in recent years, it seems clearly evident that in most instances only half the story is being reported. While clearly fees (or costs) are important with regard to any product or service rendered (financial or otherwise), the quality, value, and ultimate performance of the item purchased is just as important if not more so than fees.

Shouldn't the Discussion About Fiduciary Obligation Include the Quality of Services and Performance ... and Not Solely Be About Fees