Large Law Firm
One of Los Angeles’ largest law firms needed to provide a program for additional tax-deferral for the dozens of partners. The 401(k) Profit Sharing contributions maxed out around $50,000 and were just not enough.
Kravitz designed a Cash Balance plan that will allow the firm to contribute approximately $9,500,000 into the plan, with many of the partners receiving their age-weighted maximum every year. The firm is also delighted to continue to offer excellent benefits for employees.
Retirement Plan Illustration
Year Ending December 31, 2019
Partners 50 or above | 401(k) | Profit Sharing | Cash Balance | Total |
| 1 | $25,000 | $37,000 | $217,000 | $279,000 |
| 2 | $25,000 | $37,000 | $166,000 | $228,000 |
| : | : | : | : | : |
| 43 | $25,000 | $37,000 | $127,000 | $189,000 |
| Subtotal | $1,075,000 | $1,591,000 | $5,844,000 | $8,510,000 |
Partners under 50 | 401(k) | Profit Sharing | Cash Balance | Total |
| 1 | $19,000 | $37,000 | $120,000 | $175,000 |
| 2 | $19,000 | $37,000 | $97,000 | $152,000 |
| : | : | : | : | : |
| 47 | $19,000 | $37,000 | $74,000 | $129,000 |
| Subtotal | $893,000 | $1,739,000 | $3,695,000 | $6,327,000 |
Partners Total | $1,968,000 | $3,330,000 | $9,539,000 | $14,837,000 |
| 143 Associates | n/a* | $0 | $0 | $0 |
| 247 Other Employees | n/a* | $926,250 | $0 | $926,250 |
| Total | $1,968,000 | $4,256,250 | $9,539,000 | $15,763,250 |
Percent to Partners: 94%
*This illustration shows only the cost to the firm.
Staff employees and associate attorneys pay for their own 401(k) contributions.