Professional Pension Plans
A Coordination Problem. Not a Product Problem.
Professional pension plans — traditional defined benefit, cash balance, and 412(e)(3) fully-insured — let partner-track professionals at law firms, medical groups, dental practices, and other partnerships deduct dramatically more pre-tax income than 401(k) and profit-sharing limits permit. A well-designed plan can let a 55-year-old partner deduct $250,000 or more annually on top of the 401(k). The CPA identifies the need. The TPA designs the plan. The funding products and partner-level communication usually never come together. The result is a category of firms that know they’re leaving money on the table without a single point of contact who can coordinate the moving pieces.
Begin a conversation →Three firm profiles. One plan to design.
The right plan structure follows from the firm’s age demographics, partner income spread, and tolerance for funding volatility. The same three structures — traditional DB, cash balance, 412(e)(3) — produce very different answers depending on which profile the firm fits.
Senior partners. Compressed runway.
Partners concentrated in their 50s and 60s, stable revenue, late-career retirement focus. The right structure is usually traditional DB or 412(e)(3) — both maximize current-year deductions for older participants and accept the actuarial or insurance-funded mechanics that come with them.
- Highest contributions for older participants
- Traditional DB or 412(e)(3) typically the answer
- Less fairness concern when partners are similarly aged
Multi-generation partners. Predictable funding.
Partners spread across two or three decades of age, with mixed income and mixed time horizons. Cash balance is usually the answer — predictable annual contributions, individual notional accounts, and built-in fairness across age cohorts. Stackable on top of 401(k) and profit sharing.
- Cash balance plan most common fit
- Notional accounts handle age-spread fairness
- Predictable contributions ease firm cash flow planning
Young partners. High income years ahead.
Partners primarily in their 30s and 40s, with growing revenue and decades of accumulation runway ahead. Heavy DB-style funding is rarely the right answer yet. Optimize 401(k) and profit sharing first, layer cash balance later as the partner cohort ages and income stabilizes.
- Maximize 401(k) and profit sharing first
- Cash balance as the firm matures
- Defer DB until partner ages compress retirement runway
Most professional services firms leave six figures of deduction on the table each year.
If any of these describe your firm, a feasibility study coordinated across actuary, TPA, and funding products turns the question — DB, cash balance, or 412(e)(3) — into a number every partner can compare against last year’s tax bill.
- i. Your partners have maxed 401(k) and profit-sharing limits, and your CPA has mentioned “next-tier” options that have never been modeled.
- ii. Your firm has approached a TPA who designed a plan, but the funding products and partner-level communication never came together.
- iii. Your partner cohort is heavy on senior partners in their 50s and 60s, and the existing retirement plan was designed when everyone was 40.
- iv. You’ve heard about cash balance and 412(e)(3) plans, but no one has shown your specific firm what either would deduct or accumulate per partner.
For a full feasibility study, visit 412e3advisor.com.
412e3advisor.com is the firm’s dedicated 412(e)(3) defined benefit pension platform. Enter partner ages and W-2 income to see side-by-side projections of traditional defined benefit, cash balance, and 412(e)(3) plans — the deductible contribution and projected retirement benefit modeled per partner. The plan itself is then designed and implemented here, by Remain Life Insurance Services, LLC, working alongside a third-party administrator and actuary.
Or speak with a Remain advisor directly.