Plans we service

Downeast Pension Services, Inc. is a third party administrator for company sponsored retirement plans, specializing in defined contribution plans. These are the several types of plans that we service:

401(k) plan designs

401(k) plans allow employees to save pre-tax dollars from their pay each pay period. There are several options to consider when establishing a 401(k) plan.

Roth 401(k). The plan sponsor may choose to allow employees to contribute after-tax Roth contributions to their account as well as traditional pre-tax 401(k) contributions.

Safe harbor plans. 401(k) plans are subject to discrimination testing, which is required by the government to ensure the Employer allows all eligible employees to participate in the plan and does not discriminate in favor of the owners and other highly paid employees. There are certain "safe harbor" contributions that can be made to eliminate the need for this testing.

Employer match. The plan sponsor may choose to deposit a matching contribution based on the amount an employee contributes.


Profit sharing plan designs

The Employer may make a discretionary profit sharing contribution on behalf of eligible employees based on compensation. There are several options to consider with regard to the allocation of profit sharing contributions, below are three of the most common:

New comparability allocation (cross-tested). This formula allows a company to deposit different levels of contributions for different employees. This option allows the most potential flexibility in structuring the allocation. There are required tests, and employees may need to be given a minimum contribution to satisfy the complicated testing.

Integrated allocation. This traditional profit sharing formula allows a higher contribution to be allocated to employees with compensation above a specified integration level, most commonly based on the social security taxable wage base. There is a small amount of flexibility in the allocation formula, as defined by the IRS.

Pro-rata allocation. Each employee would receive the same percentage of compensation as a profit sharing contribution.


403(b) plan designs

A 403(b) plan may be established by some non-profit employers to allow their employees to save pre-tax or Roth after-tax (if elected) dollars from their pay each pay period. There may also be a company match or other company contributions.


Investment designs

You also have choices with regard to where to invest the plan's money.

Daily valuation arrangements. These arrangements are most common with 401(k) plans. Each participant has control over the investments in his/her account, and can choose from a menu of mutual fund options. The participants have online access to account information, and receive quarterly statements directly from the investment company.

Self-directed brokerage accounts. Some plans have owners and employees with significant balances that may wish to direct the investment of their accounts outside of the menu of pre-approved mutual funds offered through a daily valuation arrangement. These participants may open an account with a financial adviser and invest as they wish, perhaps in stocks and bonds in addition to mutual funds.

Pooled accounts. Occasionally a plan has one or more pooled accounts that may be managed by an investment manager. We can also handle this type of account, where we are responsible for reconciling all account activity and allocating earnings to each participant. We would be responsible for preparing the participant statements in this type of arrangement.

© 2012 Downeast Pension Services. Inc 41 Campus Drive, Suite 302 New Gloucester, ME 04260 Ph (207) 688-4219 Fax (207) 688-4095 info@downeastpension.com

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