At Gallant Financial, we design and build solutions with the best fit and greatest value for plan sponsors and participants. Gallant Financial delivers a full suite of smart retirement solutions for different types of retirement plans. Employers appreciate Gallant Financials simple and effective way to help meet employee retirement needs with flexible, cost-effective solutions and an open-architecture management system.
We offer the following retirement plan types:
401(k) Plan, 403(b), Plan 457 Plan
Defined Benefit Plan, SEP IRA, IRA
Non-Qualified Executive Benefits Plan
401(k) plans were enacted into law in 1978. This makes up the majority of our retirement planning business.
401(k) Plan is a defined contribution plan where an employee can make contributions from his or her paycheck either before or after-tax, depending on the options offered in the plan. The contributions go into a 401(k) account, with the employee often choosing the investments based on options provided under the plan. In some plans, the employer also makes contributions such as matching the employee’s contributions up to a certain percentage. SIMPLE and safe harbor 401(k) plans have mandatory employer contributions.
There are many options available and different ways to design a 401k plan including:
- Allowing Loans
- Allowing Hardship Distributions
- Various Matching Formulas
- Allowing Roth Contributions
- Allowing Automatic Enrollment
- Choosing Eligibility
- Setting Vesting Requirements
- Participating in Profit Sharing
Those are just a few of the many options available when designing a 401(k) Plan. We can help you determine what type of retirement plan is most appropriate for your company and what options to include.
403(b) Tax Sheltered Annuity (TSA) Plan is a retirement plan offered by public schools and certain tax-exempt organizations. An individual’s 403(b) annuity can be obtained only under an employer’s TSA plan. Generally, these annuities are funded by elective deferrals made under salary reduction agreements and nonelective employer contributions.
Please contact us if you would like to learn more about how we manage 403(b) Plans or if you are interested in setting up a 403(b) Plan for your organization.
In addition, we have relationships with multiple school districts and other tax-exempt organizations so please contact us to determine if we can manage your personal 403(b) account.
A 457 plan is a kind of defined contribution retirement plan available to state and local public employees, but can also be offered by certain nonprofit organizations. 457 Plans are similar to 401(k) Plans in that a participant can opt to contribute part of their salary into the plan, and the money is automatically deducted from their paycheck before taxes are taken out. The money grows tax deferred until withdrawn, and then taxes become due. Please note that certain 457 plans may be amended to allow for designated Roth contributions.
Please contact us to determine if a 457 plan if right for your organization.
Defined Benefit Plan
Defined Benefit Plans are more commonly known as traditional pension plans. This type of plan promises the participant a specified monthly benefit at retirement. Often, the benefit is based on factors such as the participant’s salary, age and the number of years he or she worked for the employer. The plan may state this promised benefit as an exact dollar amount, such as $100 per month at retirement. Or, more commonly, it may calculate a benefit through a plan formula that considers such factors as salary and service.
One of the most popular types of Defined Benefit Plans is the Cash Balance Plan. Cash Balance Plan is a type of defined benefit plan that includes some elements that are similar to a defined contribution plan (such as a 401(k)). In a Cash Balance Plan each participant has a hypothetical account balance. The account balance grows annually in two ways: first, a contribution and second, an interest credit. The Cash Balance Plan promises to pay the hypothetical account balance regardless of the investment returns. This is the biggest difference between Cash Balance Plans and 401(k) plans. In the Cash Balance Plan, the interest credit is guaranteed rather than being dependent on the performance of investment elections, such as in a 401(k) plan. Cash balance plans are more likely than traditional defined benefit plans to make lump sum distributions.
Many professionals find Cash Balance Plans as an excellent way to increase contributions to their retirement accounts. We have found that the following are typically good candidates:
- Privately held businesses, family businesses, or companies seeking an enhanced benefits package
- Owners and other professionals, including executives, partners, physicians, attorneys, and others who desire to contribute more than $50,000 a year to their retirement accounts: Many professionals and entrepreneurs neglect their personal retirement savings while they’re building their company. They often have a need to catch up on years of retirement savings. Maximum amounts allowed in Cash Balance Plans are age-dependent. The older the participant, the faster they can accelerate their savings. Pre-tax contributions can be as high as $100,000 to $240,000.
- Companies already contributing to employees’ retirement accounts: While Cash Balance Plans are often established for the benefit of key executives and other highly compensated employees, other employees benefit as well. The plan normally provides a minimum contribution between 5% and 7.5% of pay for staff.
- Companies that have demonstrated their ability to consistently earn income and profits: Because a Cash Balance Plan is a pension plan with required annual contributions, consistent cash flow and profit is very important to fund the plan.
Please contact us to address your Defined Benefit Plan concerns or questions.
A Simplified Employee Pension (SEP) plan provides business owners with a simplified method to contribute toward their employees’ retirement as well as their own retirement savings. Contributions are made to an Individual Retirement Account or Annuity (IRA) set up for each plan participant (a SEP-IRA).
A SEP-IRA account follows the same rules for investment, distribution, and rollovers that traditional IRAs do.
Please see our personal wealth management division to learn more about individual retirement accounts.