PENSION PLANS VS. PROFIT-SHARING PLANS
01.Core Concepts
Profit-Sharing Plan Pension Plan Characteristic Deferral of Compensation and Taxation Paying a pension at retirement Legal Promise of the Plan Yes (after two years) if plan document permits2 No1,2 Are In-Service Withdrawals Permitted? No Yes Is the Plan Subject to Mandatory Funding Standards? Up to 100% 10% Percent of Plan Assets Available to be Invested in ER Securities No Yes Must the Plan Provide QJSA & QPSA? 1 Pension plans are permitted to allow in-service distributions to participants who are age 59 ½ or older. 2 Beginning in 2024, the SECURE 2.0 Act allows for employee-funded emergency savings accounts within the qualified plan. Distributions must be available at least once per month.