Understanding 412(e)(3) Plans

7 Pages Posted: 21 May 2012

Date Written: May 21, 2012

Abstract

The 412(e)(3) plan is a defined benefit pension plan used for small employers since 1974 to supplement their retirement. This plan if properly structured can assist people in their 50s and 60s to fund more than $50,000 into their retirement accounts. In some cases up to $300,000 may be funded on a tax deductible basis. The plan takes little or no risk as it is invested in pension annuities which have outperformed the SP 500 over the last ten years.

Keywords: Pension, tax, 412(i), 412(e)(3)

JEL Classification: K34

Suggested Citation

Paleveda, Nicholas A., Understanding 412(e)(3) Plans (May 21, 2012). Available at SSRN: https://ssrn.com/abstract=2063974 or http://dx.doi.org/10.2139/ssrn.2063974

Nicholas A. Paleveda (Contact Author)

Northeastern University ( email )

220 B RP
Boston, MA 02115
United States

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