Plan Sponsor Login

Profit Sharing Plans

Profit sharing plans allow the employer to make discretionary profit sharing contributions to the plan on behalf of participants. Employers can contribute up to 25% of eligible compensation, and contributions may be based on company profits but can also be made on any other basis. The amounts are allocated, or divided among participant accounts, based on a formula provided for under the plan document. Common allocation methods include:

Profit sharing plans can include a variety of features such as vesting of participant account balances, participant loans, participant direction of investments, daily valuation, and in-service distributions. Profit sharing plans can also include a 401(k) deferral provision.