The Middlefield Banking Company

The Middlefield Banking Company


LPL Financial Products & Services

Profit Sharing

Business Retirement Plans

Generally, contributions to profit-sharing plans are discretionary. The level for contributions per each employee is the lesser of 100% of salary or $44,000. The responsibility of funding rests solely on the employer, but with the feature of a vesting schedule, this may be an attractive plan. The vesting schedule allows you to require employees to work a number of years before becoming entitled to the contributions made to their profit – sharing account. For example, an employer may require an employee to work, say, five years to become vested; the employee would become vested in a percentage, which would increase with each additional year of service. Another attractive feature of a profit – sharing plan is that loans can be made from the plan to the employer and the employee. One good thing about borrowing from a qualified plan is that the borrower pays back him/herself, including interest, unlike borrowing from a bank, where the interest is paid to the bank. The IRS has strict rules about vesting schedules and loans offered under a qualified plan. Be sure to consult with your plan benefits professional to ensure you stay within the limits of the law.

If you need further information on this retirement plan or any of the other services LPL Financial offers please contact your LPL Financial Consultant either by telephone at 888.801.1666 or via our easy inquiry form online.

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LPL Financial Consultant
Thomas Hart • 440.632.3444 • 1.888.801.1666 • 
Securities and Advisory services offered through LPL Financial, A Registered Investment Advisor, member FINRA/SIPC. Insurance products offered through LPL Financial or its licensed affiliates.
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