Our Process
Click on each circle for more details.
This is an extremely important step in the Karel-Gordon & Associates Qualified Retirement Plan Process. During this phase, our Consultants sit down with the client and their CPA, Financial Advisor or Attorney and find out what the objectives are for that client. This becomes a conversation that is on-going each year as client's objectives may change. Some of the items discussed during this phase include:
- Are the owner/partners of the company looking to maximize the tax deductibility of a Qualified Retirement Plan?
- Are there certain employees that the owners/partners wish to reward more than others?
- How much is the client looking to contribute/deduct?
We like to say that what we do is more of an art than a science. That is because during the Plan Proposal Phase, we are creatively designing a plan to meet the objectives of the business owners utilizing many different options, all within the confines of the IRS Tax Code. Each plan is individually designed. We consider this phase extremely important because Plan Design is critical in creating a smoothly run and executed plan for years to come.
Once the initial plan design has been agreed upon, we work with the Financial Advisor, CPA or Attorney to communicate this design to the business owners/partners.
Once all the preparation is complete and a final Plan Design is agreed upon, Karel-Gordon & Associates drafts customized documents that fulfill the intent of the Design. Karel-Gordon also works with attorneys who prefer to prepare their own documentation to fulfill the other necessary required functions. In certain cases, these plans need to be filed with the IRS. Plans then require a signature from the Plan Trustee. Karel-Gordon & Associates creates a Summary Plan Description (SPD) to be given to all the plan participants. The SPD not only meets the requirements of the Department of Labor, but also provides an explanation to the employee that is easily understood.
Qualified Retirement Plans are never static. Often they evolve in a manner just like the Plan Sponsor evolves. Karel-Gordon & Associates performs constant Plan Monitoring to maintain the plan's compliance with IRS Code and keep it up to date with the objectives of the business owners. Some of the plan aspects that we are looking for are:
- Changes in ownership structure
- Employees becoming eligible for the plan
- Employees terminating from the company
- Dramatic shifts in profitability of the company
At the end of each plan year, Karel-Gordon & Associates gathers the necessary updated Census Data (click here for a Census Data form.) This information allows us to keep a plan compliant, making sure all the necessary testing is met. Additionally, from this information, we can communicate to the business owners/partners their contribution amounts for that plan year and open a dialogue with the client and advisors as to the Plan Sponsor's funding objectives for the year.
Karel-Gordon & Associates prepares the annual statements required to be distributed to the plan participants as well as the required tax forms to be filed with the Department of Labor. Each year, the Plan Sponsor receives a complete Annual Report which includes the following:
- Financial position of the plan
- The valuation of the plan's funding requirements
- The values of the participant benefits in the plan
- All the required compliance testing
- Copies of the tax forms
Our Plan Consultants have an average of 25 years in the industry. They are the center of the process and remain the key communicators and drivers of each phase of the Qualified Retirement Plan Process. Our Plan Consultants work closely with our actuaries and administrators on each and every plan and remain a constant part of the entire life cycle of a plan.
Often times a Plan Sponsor, in consultation with Karel-Gordon & Associates, may decide to make changes to its plan. Other times, these changes may be dictated by the IRS. In either case, Karel-Gordon & Associates can make any desired or required amendments or restatements to the Plan. Also, if the Plan Sponsor has determined that the plan has reached the end of its usefulness to the company or participants, Karel-Gordon & Associates can handle all aspects of a Plan termination.
When employees leave a company and are entitled to receive payment of benefits from a Plan or a plan terminates, Karel-Gordon & Associates will produce distribution packages for the terminating employee that will include all the required notices and disclosures.
Over the course of a Plan's life, a Plan Sponsor may sometimes require the use of these special services that Karel-Gordon & Associates can offer. Preparing estimates of a Plan's tax deductible contributions before the end of the fiscal year can help a Sponsor budget for upcoming expenses. Most inadvertent errors made by the Plan Sponsor, as it relates to the operation of the Plan or timely signing of documents, can often times be resolved through the IRS's Voluntary Compliance Program (VCP.) Karel-Gordon & Associates can prepare all the required documents to submit for these filings. If the IRS or Department of Labor require an audit of a Plan, Karel-Gordon & Associates will be there to assist in the handling of the audit to get the IRS agent what they need as quickly as possible in an effort to expedite the closing of the audit.
Discovery Phase of Client's Needs and Objectives
This is an extremely important step in the Karel-Gordon & Associates Qualified Retirement Plan Process. During this phase, our Consultants sit down with the client and their CPA, Financial Advisor or Attorney and find out what the objectives are for that client. This becomes a conversation that is on-going each year as client’s objectives may change. Some of the items discussed during this phase include:
- Are the owner/partners of the company looking to maximize the tax deductibility of a Qualified Retirement Plan?
- Are there certain employees that the owners/partners wish to reward more than others?
- How much is the client looking to contribute/deduct?
Plan Proposal Phase
We like to say that what we do is more of an art than a science. That is because during the Plan Proposal Phase, we are creatively designing a plan to meet the objectives of the business owners utilizing many different options, all within the confines of the IRS Tax Code. Each plan is individually designed. We consider this phase extremely important because Plan Design is critical in creating a smoothly run and executed plan for years to come.
Once the initial plan design has been agreed upon, we work with the Financial Advisor, CPA or Attorney to communicate this design to the business owners/partners.
Document Creation and Adoption Phase
Once all the preparation is complete and a final Plan Design is agreed upon, Karel-Gordon & Associates drafts customized documents that fulfill the intent of the Design. Karel-Gordon also works with attorneys who prefer to prepare their own documentation to fulfill the other necessary required functions. In certain cases, these plans need to be filed with the IRS. Plans then require a signature from the Plan Trustee. Karel-Gordon & Associates creates a Summary Plan Description (SPD) to be given to all the plan participants. The SPD not only meets the requirements of the Department of Labor, but also provides an explanation to the employee that is easily understood.
Constant Plan Monitoring Phase
Qualified Retirement Plans are never static. Often they evolve in a manner just like the Plan Sponsor evolves. Karel-Gordon & Associates performs constant Plan Monitoring to maintain the plan's compliance with IRS Code and keep it up to date with the objectives of the business owners. Some of the plan aspects that we are looking for are:
- Changes in ownership structure
- Employees becoming eligible for the plan
- Employees terminating from the company
- Dramatic shifts in profitability of the company
Year End Census Gathering, Valuation, Contribution Determinations
At the end of each plan year, Karel-Gordon & Associates gathers the necessary updated Census Data (click here for a Census Data form.) This information allows us to keep a plan compliant, making sure all the necessary testing is met. Additionally, from this information, we can communicate to the business owners/partners their contribution amounts for that plan year and open a dialogue with the client and advisors as to the Plan Sponsor’s funding objectives for the year.
Participant Statements, Annual Reports and 5500 Forms
Karel-Gordon & Associates prepares the annual statements required to be distributed to the plan participants as well as the required tax forms to be filed with the Department of Labor. Each year, the Plan Sponsor receives a complete Annual Report which includes the following:
- Financial position of the plan
- The valuation of the plan’s funding requirements
- The values of the participant benefits in the plan
- All the required compliance testing
- Copies of the tax forms
Amendments, Restatements and Plan Terminations
Often times a Plan Sponsor, in consultation with Karel-Gordon & Associates, may decide to make changes to its plan. Other times, these changes may be dictated by the IRS. In either case, Karel-Gordon & Associates can make any desired or required amendments or restatements to the Plan. Also, if the Plan Sponsor has determined that the plan has reached the end of its usefulness to the company or participants, Karel-Gordon & Associates can handle all aspects of a Plan termination.
Plan Distributions
When employees leave a company and are entitled to receive payment of benefits from a Plan or a plan terminates, Karel-Gordon & Associates will produce distribution packages for the terminating employee that will include all the required notices and disclosures.
Year End Estimates, VCP Applications and IRS/DOL Audits
Over the course of a Plan’s life, a Plan Sponsor may sometimes require the use of these special services that Karel-Gordon & Associates can offer. Preparing estimates of a Plan’s tax deductible contributions before the end of the fiscal year can help a Sponsor budget for upcoming expenses. Most inadvertent errors made by the Plan Sponsor, as it relates to the operation of the Plan or timely signing of documents, can often times be resolved through the IRS’s Voluntary Compliance Program (VCP.) Karel-Gordon & Associates can prepare all the required documents to submit for these filings.
If the IRS or Department of Labor require an audit of a Plan, Karel-Gordon & Associates will be there to assist in the handling of the audit to get the IRS agent what they need as quickly as possible in an effort to expedite the closing of the audit.
Plan Consultant
Our Plan Consultants have an average of 25 years in the industry. They are the center of the process and remain the key communicators and drivers of each phase of the Qualified Retirement Plan Process. Our Plan Consultants work closely with our actuaries and administrators on each and every plan and remain a constant part of the entire life cycle of a plan.