Defined benefit plan design

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You are speaking to Jen James regarding implementing a defined contribution plan for her business. Her business's income can be volatile from one year to the next. She has expressed an interest in adopting a Money Purchase plan as she believes it will make her company more attractive to new hires. How might you respond regarding the consideration of this plan type?

A. Consider a defined benefit plan design instead to allow Jen to defer the maximum amount of taxable income possible

B. Suggest a profit sharing plan as a means of providing equivalent contributions to the plan with more flexibility to accommodate variable business revenues.

C. Recommend a plan providing for employee contributions only in order to reduce the required cash outlay to establish and fund the plan

D. Present the option of a SIMPLE IRA in order to reduce required employer contributions

Reference no: EM133074300

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