Who We Are...
Employee Incentive Plans, Inc.
- Our
Firm
- Administration
- Investments
- Advantages
- Choosing
Your Own Plan
Employee Incentive
Plans, Inc. (EIP) is an Employee Benefit Consulting Firm specializing in the design and
administration of Qualified Pension, Profit Sharing and 401(k) Plans for Corporations,
Partnerships and Self-Employed Individuals. We also assist Employers in establishing other
forms of Employee Benefit Programs such as Cafeteria Plans and Non-Qualified Executive
Compensation Plans. Providing services since 1974, EIP has consistently been one of the
major benefit consulting firms in the Austin area providing plan design, document,
administration, and insurance services. Our goal is to provide professional service using
the most efficient systems available to keep legal and administrative costs at a minimum.
EIP, an Austin firm,
provides services to Austin, Dallas, Bryan/College Station, Houston, and surrounding
areas. We believe EIP is uniquely qualified to provide services to the medium and small
sized employers. However, we are capable and can service larger employers. We are
committed to benefits consulting and administration services with an average of
approximately eight years of experience per professional employee and affiliates. The size
and technical expertise of our firm allows us to provide personal level of assistance
through the design and decision process. Determination of which type of plan to use will
depend on a variety of factors such as the benefits provided by the current plan and the
desires of the plan sponsor. The cost variation between the different plan types may also
influence the decision. Individually designed plans are the most costly while the use of
prototype documents is less expensive. EIP advocates the use of the Prototype Plan
documents as they are the least expensive and accommodate most small to medium sized
employers.
Bruce A.
Rice CPA, Owner and President of Employee Incentive Plans, Inc. of Austin,
Texas, started in the employee benefits field as a Tax Manager with Peat Marwick, one of
the largest accounting and consulting firms in the world. While there, he specialized in
employee benefits and tax consulting for small to multi national publicly traded
companies. He was trained in the benefits and consulting out of Peat Marwick National
Office in Washington D.C. His background and expertise provide an excellent foundation for
consulting businesses in the development of retirement plans, cafeteria plans, and
deferred compensation arrangements. He also assisted the principals of such businesses
with personal financial and estate planning.
His education
includes a Bachelor of Science degree in Accounting from the University of Houston. Before
coming back to Texas, he had completed one half of the Masters of Taxation at Bryant
College in Rhode Island. Mr. Rice, who enjoys public speaking, was often invited by the
Rhode Island Society of Public Accounting, Institute of Management Accountants and several
Chamber of Commerce Associations to teach or lecture on benefits or tax issues. He
currently lectures regularly for the Austin Society of Certified Public Accountants.
He is a member of the
American Institute of Certified Public Accountants, the Texas and Austin Societies of
Certified Public Accountants, Estate Planning Council of Central Texas, the Austin
Association of Life Underwriters, and the Funds Allocation Committee of the United Way of
Austin.
Donna M. Rice QPA,
Owner and Vice-President of Employee Incentive Plans, Inc. has been in the benefits field
since 1981. She was the Director of Plan Administration of a large pension consulting firm
in Providence, Rhode Island before coming to Austin. Her expertise provides the technical
knowledge required for administration and ongoing plan design.
Donna has a Bachelor
of Science degree from the University of Houston. She is a member of The American Society
of Pension Actuaries and participates in the Funds Allocation Committee of the United Way
of Austin.
Employee
Incentive Plans, Inc. is a third party administrative firm that administers qualified
retirement plans. The administration of a plan will require keeping records of plan
contributions, benefits and employee information as well as filing certain tax forms
annually to substantiate the tax deduction allowed the firm. Keep in mind the
administration can be handled almost totally by an administrative firm and may involve
very little effort or cost on your part.
Generally, administration may include:
- Establishing a plan and trust
document.
- Filing the plan with the Internal
Revenue Service.
- Notifying employees of the
existence of the plan and generally stated plan provisions as required by the Department
of Labor and the Internal Revenue Service.
- Reviewing the plan each year to
assure proper contributions have been made to maintain the benefits.
- Filing a return to the Internal
Revenue Service annually to report on the status of contributions and plan assets.
- Preparing the reports annually as
required by the Department of Labor.
- Notifying participants annually,
or as often as valuations are chosen, of the status of the plan and their particular
benefits.
- Determining which employees will
participate each year as well as benefits that may be payable to those who terminate or
retire.
- Reviewing all required plan
testing such as, 410(b) coverage, 401 (k) and 401(m) testing, top-heavy and 415
limitations.
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Small
businesses invest plan assets in a variety of funding vehicles. The trustee of the plan
(normally the business owner) is responsible for the investment of plan assets
"prudently" and "for the exclusive benefit" of plan participants. This
is referred to as trustee directed and means the trustee can be held responsible for the
performance of investments.
Another option of
investing is referred to as participant directed election. This format allows the
participant to direct the investment of their accounts. The trustee (or employer) will
determine the funds that the employees can choose from and is responsible for educating
the employees on the investment options.
Generally, the investment
powers (and limitations) for the trustee are contained in the trust document. Investments
might include mutual funds, certificates of deposit, real estate, stocks, bonds,
annuities, or life insurance contracts.
Businesses may also
consider investing a portion of the funds in life insurance because it provides several
advantages in a qualified plan. Insurance provides an immediate, sizable death benefit for
participants not living to retirement with a significant portion of the` death benefit
being income tax free. The dependable return on life insurance cash values provides
balance to other, more aggressive plan investments and premiums are paid out of the plan
directly which is generally considered a cost-effective approach to purchasing insurance.
Employee Incentive Plans,
Inc. (EIP) can provide you with various investment options for your plan. EIP will help
you to determine the right choice of investments as well as create an investment
philosophy for the plan.
Small
businesses generally establish retirement plans because of the tax advantages available to
the firm and the employees. Combined with the more subtle business advantages, the
establishment of a plan can be a sound financial decision.
TAX ADVANTAGES:
- They provide you with tax
deductions for your plan contributions and administrative expenses.
- Contributions are not currently
reportable as income by the employees.
- Investment earnings grow on a
tax-deferred basis.
- Retirement benefits may qualify for
favorable income tax treatment.
BUSINESS ADVANTAGES:
- They enhance your competitive position
in the labor marketplace.
- Competent employees can be retained
with this valued fringe benefit.
- They provide your employees, including
management, with logical, effective ways to accumulate capital and/or retirement income.
- Profit sharing plans and 401(k) plans
motivate employees to take a more personal interest in the company’s success.
Employee
Incentive Plans, Inc. (EIP) is a third party administration firm that can consult and
assist you in determining the best plan for your organization. Choosing the plan best
suited for your organization depends on a thorough analysis of various factors such as
some of those listed below:
Workforce
demographics, cost considerations, administrative requirements, Legislative/tax
regulations, Employee expectations, Business and individual tax planning, Special
objectives for the owners’/key executives’ deferred compensation and other
unique considerations.
Profit Sharing Plans
These
plans provide for deferred sharing of employer profits with employees. Since neither the
contribution nor the benefit is fixed some employers find this desirable if they are not
certain how much they can contribute to a plan from year to year. The maximum contribution
for the firm is up to 100% of eligible salary, with a limit of $40,000 total
contribution per participant. This plan generally favors younger employees and is utilized by
businesses requiring flexible contribution levels. The benefit at retirement will be the
accumulation of all contributions and earnings to a participant’s account.
401(k) Savings Plan
These
plans fall under the Profit Sharing Plan rules and allow pre-tax employee contributions,
with or without matching employer contributions. The annual individual savings deferral is
indexed by the government each year for cost of living adjustments. This type of plan
helps employees get involved in saving for retirement and helps them accumulate capital
faster.
Money Purchase Pension Plans
In
a money purchase plan, the annual employer contributions are defined by a plan formula.
The annual contribution limit for any participant can be set at any contribution
percentage not to exceed 25% of his/her total compensation (to a maximum of
$40,000 per
participant). This plan also generally favors younger participants. The benefit at retirement will be the accumulation of all contributions and
earnings to a participant’s account.
Defined Benefit Plans
The
retirement benefit is fixed, generally as a percentage of pay. The contribution will be
whatever funding is required to provide the benefit for each employee. The maximum benefit
allowed is 100% of compensation with maximum limits as set by the IRS. This maximum amount
is indexed each year for cost of living adjustments. This type of plan generally favors
older, higher paid employees and is for the employer who is looking for higher deduction
limits.
Employee Stock Ownership Plans
ESOP's allow employees
to become stockholders in the company through employer contributions of the company's
stock. The regulations that monitor this plan is complex and incorporate many of the
profit sharing rules.
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Copyright © Employee Incentive Plans, Inc. All rights reserved.
Revised: December 01, 2003.
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