Introducing a forward thinking retirement plan design
USI Consulting Group's Direct Recognition Variable Investment Plan (DR-VIP) is a qualified retirement plan1 designed to optimize benefits, mitigate risk and minimize costs, for companies with business owners and professionals who seek high tax-deductible contributions2 in excess of the defined contribution plan limits.
TYPICAL RETIREMENT PLANS FOR PROFESSIONAL FIRMS & BUSINESSES
Defined contribution plans (401(k) and profit sharing) are subject to relatively low contribution limits3. Traditional defined benefit and cash balance plans permit much higher contributions4, but assets must be pooled together, and the firm is responsible for underfunding due to underperforming investments. This creates a risk of unfunded benefits and uncertainty with respect to future contribution requirements.
HOW DR-VIP WORKS
DR-VIP leverages the best features of defined contribution and defined benefit plans.
- 401(k) profit sharing plan assets continue to be individually directed by participants
- DR-VIP assets are pooled together and invested in accordance with the firm’s overall investment objectives
- Participants may access their 401(k) profit sharing and DR-VIP benefits at any time online, via smart phone, tablet or telephone
- DR-VIP participant benefits increase or decrease in direct relation to investment results, mitigating the underfunding risk associated with traditional defined benefit pension plans and cash balance plans
DR-VIP PLAN ADVANTAGES
- Contributions are tax-deductible
- Total contributions can be as high as $300,0005 per person6
- Plan assets are exempt from creditors7
- Risk of the plan being underfunded is mitigated
- Plan contributions are known, consistent and reliable
- With the risk of underfunding mitigated, the plan assets can be invested to optimize returns
- Every plan is submitted to the IRS for review8
How USI Consulting Group Can Help
To learn more about our Direct Recognition Variable Investment Plan, please visit our DR-VIP FAQs page, contact your USICG representative or reach out to us directly at email@example.com.
1 As defined under IRC Sections 401(a) and IRS Regulation 1.411(a)(13)(d)(6)
2 As allowed under IRC Section 404
3 In accordance with IRC Sections 402(g) and 415(c)(1)(A)
4 In accordance with IRC Section 415(b)(1)(A)
5 When integrated with a 401(k) profit sharing plan, and determined by age and other factors.
6 Determined by individual participant age & other factors.
7 IRS Code Section 401(a)(13).
8 The submission, made on behalf of each individual plan, is an application for a letter of favorable determination of the plan’s tax qualification.