Defined Benefit For One^SM

What is a Defined Benefit Plan?

A defined benefit plan is not an individual account plan. It is a plan that promises to pay a certain benefit at retirement. The benefit payable to an employee is based on a formula set forth in the plan that often considers both length of service and compensation. The annual contribution is determined by an actuary based on factors such as employee years to retirement, compensation and investment earnings. The commitment of the plan sponsor is to satisfy funding requirements to provide retirement benefits. If the plan is fully funded, no contributions may be required.

How much can I contribute to this Plan?

Annual required contributions vary widely depending on age, compensation and previous investment performance. For a first year plan, here are some sample contributions using common assumptions. We will design specific assumptions to suit your needs and circumstances.

Approximate Annual Contributions

		Compensation:
	$100,000	$150,000	$200,000
Age: 45(retiring at age 60)	$105,404	$146,605	$146,605
Age: 55(retiring at age 62)	$109,079	$163,619	$174,522
Age: 60(retiring at age 65)	$106,805	$160,207	$170,883

You will likely need to fund amounts in approximately the same amounts for the next 3-5 years. However, depending on actual investment performance, you may be required to contribute more or less. Care should be taken in selecting investment options.

If the above illustrations do not meet your anticipated needs, or if you have employees, please call our office for more information, including combination DB/DC and 401(k) For One^SM plans.

How is my money invested?

Current law allows plan sponsors to invest in a wide variety of assets. Stocks, bonds, CD’s, mutual funds, etc. are all common in retirement plans. If you are utilizing the services of our strategic partner for corporate trustee services, you are also able to invest in real estate and deeds of trust. Unusual assets such as art work, gemstones, coins, antiques, etc. are generally prohibited as a matter of law.

Corporate Trustee Option

If you elect to use the services of our strategic partner* as your corporate trustee, you can still utilize the services of your current financial advisor or broker. Please contact California Pensions’ Trust Operations Department for additional details as there are specific operating conditions for the accounts. You will receive quarterly statements of your account detailing assets, transactions and fees. California Pensions can provide duplicate statements to brokers, CPA’s, or other interested parties if you so desire. The services of a corporate trustee relieves you of the duty to provide California Pensions with annual trust reconciliation forms and schedules which are needed for annual calculations as well as annual government filings.

What are my costs and fees?

There is a $1,500 one time set up fee (submission to the IRS is billed separately) and an annual administration fee of $1,200. Other fees may apply based upon specific services which may be required, or if you choose to utilize corporate trustee services.

What steps are involved in opening a Defined Benefit For One^SM account?

California Pensions makes sure that minimal work is required for our clients to open an account. Following is a very simple process involved:

	Client fills out Plan Sponsor Questionnaire, signs Client Service Agreement, and makes setup fee payment. (Paperwork may be downloaded here)
	California Pensions drafts the plan document, and opens account on asset accounting system and calculates initial contribution.
	Client reviews documents and signs, review and agrees to assumptions, and funds for first year.

*Corporate trustee services provided through California Pensions by Lincoln Trust Company, a Fiserv company.

Defined Benefit For OneSM

Defined Benefit For One^SM