Self-directed defined contribution plans.
A defined contribution plan provides an individual account for each participant. The benefits are based on the amount contributed and are also affected by income, expenses, gains and losses. Some examples of defined contribution plans include 401(k) plans, employee stock ownership plans and profit sharing plans among others. Preferred Trust's self-directed defined contribution plans are extremely flexible, and have been designed to meet your needs and the needs of your organization. If your current Profit Sharing or 401(k) plan does not offer self-direction, Preferred Trust can help.
Consider a Preferred Trust Self-Directed Defined Contribution Benefit Plan if:
- You and your employees want to decide on how much money to save
- You’d like a plan that can be funded through payroll deductions
- You would like a plan where you can take lump-sum distributions
- You want the broadest possible investment choices.
Preferred Trust Offers Two Main Types of Self-Directed Defined Contribution Plans:
- Preferred Trust Self-Directed Traditional 401(k). Employees may defer a percentage of their salary to any of several 401(k) investment accounts. The maximum amount of the allowable 401(k) contribution changes annually. The Preferred Trust Self-Directed Traditional 401(k) is offered both with and without a Roth option, permitting after-tax contributions to the account.
Consider a Preferred Trust Self-Directed Traditional 401(k) Defined Contribution Plan if:
- You’d like to match employee contributions on a dollar or a percentage basis.
- You want to promote long-term employment by offering a vesting schedule, permitting the employee to own a certain percentage of the matched funds over time.
- Your employees want to be vested 100 percent in the amount contributed from their pay.
- You would like more investment choices.
- Preferred Trust Self-Directed Individual(k) Plan. The Preferred Trust Self-Directed Individual(k) Plan is a defined contribution plan for businesses that employ only the owners, their spouses, and partners. Read more on the Individual(k) Plan page.
You may self-direct investments in your employer plan through the Preferred Trust Self-Directed Outsourced Service Model. To do this, you must have an approved plan document from a current plan administrator. In this case, Preferred Trust would only provide the required record-keeping on your self-directed investments. This option is available with plan types such as Traditional 401(k), Roth 401(k), Profit Sharing Plans, and Employer Stock Ownership Plans.
