1) new comparability plans
When it comes to saving for
retirement, there are many
choices available to help
participants set aside more for
their future. We’re here to help
with our New Comparability plan.
Here’s a plan that allows employers to maximize
contributions to a targeted group. In other words,
there are different benefit structures for different
divisions. This option can stand alone or be used in
conjunction with other plan designs.
The concept behind New Comparability is to
demonstrate that a specific group of employees
is achieving comparable benefits to those achieved
by another group by testing on the basis of benefits
at retirement rather than current contributions. In
order for such a plan to meet non-discrimination
requirements, certain minimum contributions are
required for all benefiting employees.
Good Candidates
Companies with owners and key employees
who are older than a significant portion of their
employees are good candidates for a New
Comparability plan. Keep in mind, if the goal is to
maximize contributions for certain groups, the
employer should be willing to make flexible
contributions, which may vary with demographics.
Annual Contribution Limits
The example on the next page, based on 2015
annual contribution limits, illustrates how New
Comparability plans stack up against other
profit sharing plans. It shows what percentage
of profit sharing contributions can go to highly
compensated versus non-highly compensated
employees. It also demonstrates that with a
New Comparability profit sharing plan highly
compensated employees can receive the maximum
benefit with less total cost to the company.
Establishing Groups
The structure of the groups must be clearly defined
in the plan document. There can be as few as two
groups (e.g., highly compensated employees and
non-highly compensated employees), or many
more based on classifications such as service,
job title, division, age, etc.
Ameritas Life Insurance Corp. of New York
RP 1121 NY 12-14
For Financial Professional and Plan Sponsor Use Only
2) Comparison by Plan Type
2015 Maximum Contribution Illustration
Employee
Age
Compensation
New
Comparability
Integrated
Profit Sharing
Pro Rata
Profit Sharing
A
50
$265,000
$53,000
$53,000
$53,000
B
45
$265,000
$53,000
$53,000
$53,000
C
40
$40,000
$2,000
$6,740
$8,000
D
32
$35,000
$1,750
$5,897
$7,000
E
28
$28,000
$1,400
$4,718
$5,600
F
25
$20,000
$1,000
$3,370
$4,000
$633,000
$112,150
$126,725
$130,600
% to HCE
94%
83%
81%
% to NHCE
6%
17%
19%
Total
HCE=Highly compensated employees (A&B)
NHCEs=Non-highly compensated employees (C,D,E & F)
The illustration above is hypothetical and is for illustration purposes only.
More Information
A New Comparability plan may be just the plan you’re looking for.
Contact your Financial Professional for more information on your retirement plan strategies.
Ameritas Life Insurance Corp. of New York
Ameritas Life Insurance Corp. of New York
Retirement Plans Division
1350 Broadway, Suite 2201
New York, NY 10018
800-923-2732
ameritas.com
This information is provided by Ameritas®, which is a marketing name for subsidiaries of Ameritas Mutual Holding Company,
including, but not limited to: Ameritas Life Insurance Corp., Ameritas Life Insurance Corp. of New York and Ameritas Investment
Corp., member FINRA/SIPC. Ameritas Life Insurance Corp. is not licensed in New York. Each company is solely responsible for its
own financial condition and contractual obligations. For more information about Ameritas®, visit ameritas.com.
The Ameritas Retirement Advantage Series refers to a group annuity variable contract issued by Ameritas Life Insurance Corp.
of New York (Form FA 64349).
Ameritas® and the bison design are registered service marks of Ameritas Life Insurance Corp. Fulfilling life® is a registered service
mark of affiliate Ameritas Holding Company.
© 2014 Ameritas Mutual Holding Company
For Financial Professional and Plan Sponsor Use Only