The Profit Sharing Plan is qualified retirement plan that is available to any size employer. It offers the same high contribution levels as a SEPIRA, but with flexible plan design options. It allows employers the option to customize plan eligibility, vesting and distribution options for employers seeking to be more selective. As a result, it is subject to ERISA’s1 rules and requirements. The OppenheimerFunds Profit Sharing Plan offers two low cost plan types to meet employers’ needs.

  • Trusteed Plan: As trustee, OppenheimerFunds preselects certain plan features and provides certain reporting, recordkeeping or other administrative services as directed by the plan sponsor. All plan assets must be invested in the Oppenheimer funds.
  • Non-Trusteed Plan: Ability to select any plan feature options. Plan must select a trustee and access OppenheimerFunds and outside investments.

Who Qualifies

Ideally suited for sole proprietors or small business owners with variable earnings, looking for a plan with flexible design options.

Plan Features

Employee coverage requirements

  • Must include employees age 21 and up to two years of service.
  • At least 1,000 hours of service annually.
  • Employer may set less restrictive requirements.

Vesting

  • Trusteed Plan: 100% immediate vesting.
  • Non-Trusteed Plan: Flexible.

Funding the Profit Sharing Plan and contribution limits for 2016
This is an employer only funded plan. Employer contributions are discretionary. The maximum tax deductible employer contribution is 25% of eligible payroll or 20% for self-employed individuals. Overall maximum contribution is $53,000 or 100% of compensation up to $265,000.

Withdrawals

  • Loans:
    • Trusteed Plan: Not permitted.
    • Non-Trusteed Plan: Permitted.
  • Hardships are permitted.
  • Withdrawals are permitted after a triggering event occurs: retirement, termination of service, death or disability.
  • Generally withdrawals are penalty-free after age 59 ½.
  • Certain exceptions may apply; see IRS Publication 590-B for additional information.

Employer’s responsibility

  • Operate plan in accordance to the terms of the plan document.
  • Fund plan timely.
  • File Form 5500.
  • Perform Annual Nondiscrimination testing.

Investments

OppenheimerFunds is a high conviction global leader in asset management with a history of providing long-term innovative investment strategies, combined with intelligent risk taking, to help meet investors’ needs.

  • Trusteed Plan: All OppenheimerFunds’ taxable mutual funds.
  • Non-Trusteed Plan: Access to outside funds. Up to 25% of funds must be invested at OppenheimerFunds.

Administrative fees

  • No plan installation fees. No additional charge for IRS approved plan documents.
  • Low annual maintenance fee per participant2:
    • $30 for account balances under $50,000.3
  • $75 loan fee if applicable for Non-Trusteed Plan.
  • Fund expenses apply.
  • Additional fees apply if working with a Third Party Administrator.

Next Steps

To get started, download the corresponding Profit Sharing Plan Establishment Kit and access instructional video for assistance with completing the Adoption Agreement. Material and return by the end of the plan year (December 31 for calendar year-end plans).

Call 800.255.2750 to talk to your Regional Advisor Consultant for more information.

1The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that sets minimum standards for most qualified plans to protect the participants in these plans. Employers are encouraged to work with a qualified third party administrator or recordkeeper when offering this plan type to help keep the plan in compliance.

2Other account-related fees (if applicable), and fund expenses apply.

3The fee will be waived if the total investments in Oppenheimer funds retirement and/or nonretirement accounts, excluding OppenheimerFunds direct-sold 529 plans, is $50,000 or more.