Tax Qualified Plan

Advantages

•Employer contributions are tax-deductible when made, even though tax deferred to employee.

•Earnings on investments accumulate tax-free which allows contributions and earnings to compound at a faster rate.

•Assets are exempt from the claims of creditors.

Disadvantages

•Plan must meet numerous guidelines to maintain the qualification of the plan such as coverage of employees, eligibility to participate, vesting requirements, distribution rules, contribution and benefit limitations, special top heavy rules, nondiscrimination rules, and other miscellaneous provisions.

•Limited access to assets while a participant is still employed.