Our Experiences

It is paramount that the SWG white-glove experience is delivered to both clients we serve, across all lanes of our expertise. We believe in a dual-client model, where the first client is either the advisor or the advisor alliance in collaboration, and the secondary client is the “end user” utilizing our recommended solutions. As seen below, our results tend to speak for themselves.

“You’re MOST qualified to help the person that you used to be.”

– Ed Mylett

Our Results

Split-Funded Combination Plan Case Study (Company 1)

This company had a standard profit sharing plan in place at inception. We were able to reduce the employee cost and help them reduce a large tax burden via better testing, adding a 401(k) and a split-funded defined benefit plan.

Split-Funded Qualified Plan Case Study (Company 2)

This company had a SEP IRA in place at inception. We were able to help transition that into a maximized profit sharing/defined benefit combination plan for tax reduction purposes.

Split Funded Defined Benefit Plan Case Study (Company 3)

This company had nothing in place at inception. They had a very large tax exposure every year and came to us for the use of plan design as a tax reduction strategy. We were able to derive a sizeable annual deduction for them through a maximized profit sharing/defined benefit combination plan.
This plan also serves to exemplify how age factors into the results of plan contributions as all of these owners are maximum earners and the only differentiator is age.
Each ‘Owner’ listed in this case study (i.e., Owner 1, Owner 2, etc.) shows the power of what can be done for 1 person self-employment scenarios (1099’s, Single Member LLCs, sole proprietors, etc.)

Advanced Qualified Plan Design Case Study (Company 4)

This company had nothing in place but desired a 401(k) for employee retention purposes. We were able to deliver on the wish in addition to helping achieve a large reduction through a properly designed combination plan structure.
This was only made possible as the majority of employees were part-time and ineligible. This factor alone made the plan designable and saved the client from unnecessary taxation.

Cash Balance Plan vs. Split Funded (Profit Sharing/Defined Benefit) Case Study

This is a case study that takes what the industry believes to be “state of the art” and a max plan design (the status quo cash balance plan design) and shows it compared to a true max plan design, utilizing what can be done within the split funded profit sharing/defined benefit plan space for retirement and tax reduction purposes.

This material should be considered representative in nature and does not take into account your specific situation and is not intended as a recommendation. Further, this information should not be considered tax or legal advice. Such advice should be obtained from a qualified attorney or tax advisor.

Each individual/employer should consult with tax advisor(s) as well as a third-party administrator to ensure that the proper calculations, filings, and plan designs are appropriate for their respective situation.

Areas of Expertise

The brainchild behind SWG was the recognition that one specific large problem tends to expose others that also require solutions that are advanced in nature. The process of solving large current income tax problems leads to the opportunity to check multiple boxes at once for our clientele.

SWG Seasoned Money Strategies & Exits
SWG Split Funded Defined Benefit Plans
SWG Advanced Qualified Plan Design
SWG Split-Funded Qualified Plans
SWG Split-Funded Combination Plans
SWG Premium Finance
SWG Estate Planning
SWG Distribution Planning
SWG Advanced Planning Strategies
SWG Wealth Management

SWG Split Funded Combination Plans

Perhaps the most Advanced Qualified Plan Design in the qualified plan realm is the Split Funded Combination Plan. The term “Split Funding” is an actuarial term for the usage of the maximum allowable permanent insurance premium as part of a new contribution into a Defined Benefit Pension Plan.
The concept of a Split Funded Combination Plan is when you then take that maximized Defined Benefit Pension Plan and fully max cross-test it against a maximized Defined Contribution Plan, based on eligible members, their ages, and their compensation.
This is a complex actuarial procedure that when handled efficiently, can result in larger pre-tax contributions for owners as well as the key members of a business, while also minimizing the overall eligible demographic cost.
These advanced plans protect the future result of a fully funded pension and can deliver larger deductions with more annual flexibility through the key funding years, in comparison to other common styles of qualified plans. Split Funded Combination plans and the “Split Funding” of qualified plans in general, are the primary types of plan designs that Shepherd Wealth Group is known for and specialize in.

SWG Split Funded Qualified Plans

The concept of “Split Funding” references the usage of permanent pension trust life insurance upon actuarially tested allowable limits within a Defined Contribution Plan or a Defined Benefit Plan.
“Split Funding” is most commonly used for additional tax leverage, plan flexibility and plan size. It can also be used to help with distribution and estate planning on a pre-tax basis. This concept is not limited to either style qualified plan, as it can be tested accordingly in the Defined Contribution Plan, the Defined Benefit Plan or in both plan structures.

SWG Split Funded Defined Benefit Plans

A “Split Funded” Defined Benefit Plan is a private pension plan that is max tested for the actuarial allowable amount of pension trust insurance premium as an asset component of the overall deductible annual plan contribution.
When utilized in a solo Defined Benefit style pension or in a combination style pension, the reasons are as follows:
  1. To “protect the benefit” of the plan (the death benefit of the insurance must be incidental to the monthly and/or lump sum of the pension).
  2. To create larger annual tax-deductible contributions.
  3. To add more annual flexibility in plan contributions so it may adapt with lean and rich years in business.
  4. To leave the potential client with another asset class on top and more options upon the close of the plan once the pension has been fully funded.

SWG Advanced Qualified Plan Design

Advanced Qualified Plan Design is often deployed for tax reduction purposes. “Advanced” references max testing features of plan design for both the Defined Contribution Plan and the Defined Benefit Plan.
These testing features are handled by specialists in the actuarial marketplace. Advanced and customized plan design is only handled by consulting and design-oriented actuaries that understand how to test qualified plans to drive the most efficient result with a tax impact. Most traditional qualified plans are handled by Third Party Administration.
Third Party Administrators (TPAs) often do not handle custom design work as they are built for administration of plans, with the purpose of volume and on prototypical testing thresholds. Actuarial design holds its own unique place in the industry and is much rarer.

SWG Seasoned Money Strategies & Exits

Seasoned Money Strategies and Exits incorporate a multitude of different ways to turn large pre-tax traditional retirement assets into tax-free distribution while living or a tax-free payout upon death, outside of the client’s estate for net worth reasons.
The concept of “Seasoned Money” references when monies are no longer part of “new” annual contributions for current year tax purposes but instead have been in the account for over one year and are “Seasoned”.
Once this is the case those assets can be repurposed through one of many different advanced insurance strategies to convert tax-deferred assets into tax-free assets, regardless of if sourced from an IRA or a Qualified Plan.