1. A Tax Strategy for High Income Self-Employed and Small Businesses Owners Defined Benefit Plans for Small Business Owners

2. Copyright 2008 Dedicated Defined Benefit Services LLC 2 Defined Benefit Plans ─ in the News “Benefits in a Pension for Now and Beyond” “Create Your Own Pension Plan:Classic retirement plans are an intriguing option for shielding small-business income from the IRS” Fortune Small Business, February 2008 “High contribution limits and tax benefits are big pluses for DB plans” Investment Advisor Magazine October 2007 November 2007 “Creating a pension plan helps business owners and the self-employed sock away more tax-deferred cash for retirement” Smart Money, October, 2008

3. Copyright 2008 Dedicated Defined Benefit Services LLC 3 Today’s Presenter  Advisor Name & photo  Affiliation with CE sponsor (DBBS)  Expertise  Connection to audience Replace with your photo

4. Copyright 2008 Dedicated Defined Benefit Services LLC 4 Agenda  Return of the Small Business DB Plan –Defined Benefit Plans At a Glance –Regulatory Changes –Market Opportunity –Compared to other Retirement Plans –The OnePersonPlus ® Program from Dedicated DB  Ideal Clients  Meeting the Needs of Your Clients –Presenting to your client –Fees –Key Dates –Opening a DB Plan –Follow through

5. Copyright 2008 Dedicated Defined Benefit Services LLC 5 Defined Benefit Plans at a Glance  Qualified retirement plans  Retirement age is typically 62 or older  Contributions are tax deductible  Highest available contributions and tax deductions of any qualified retirement plan

6. Copyright 2008 Dedicated Defined Benefit Services LLC 6 DB Plans are Goal-oriented  Goal or “benefit” represents the amount of retirement wealth the plan will provide annually at retirement age  Benefit is established when plans are opened –Based on age, income and years until retirement –Capped at $185,000 per year (for 2008)  Employer commits to achieving the goal through regular, annual contributions large enough to meet the goal  Plan can be amended to change the goal

7. Copyright 2008 Dedicated Defined Benefit Services LLC 7 Recent Legislation Favors Small DB Plans  2000 - Repeal of IRC Section 415(e) gave highly compensated individuals opportunity to open and fully fund a DB even if they had accumulated $millions in defined contribution plans  2001 – EGTRRA lowered retirement age from 65 to 62 and increased retirement benefit from $140,000 to $160,000 per year (cost of living increased maximum to $185,000 in 2008)  2006 Pension Protection Act Increases flexibility –Integrate with a single person 401(k) –Increase contribution in early “windfall” years

8. Copyright 2008 Dedicated Defined Benefit Services LLC 8 A Growing Market: High Income, Self-employed Baby Boomers  From a pool of 15 million+ self-employed* ( incorporated or not ) –50% of self-employed are 45+ –27% are professionals (management, business, finance)  Approximately 1 million self-employed earn $100,000+*  By 2020: US population age 50 – 75 projected to increase 50% –From 61 million in 2000 To 93 million by 2020 *Sources: Re: Population: Self-Employment in the United States: An Update Monthly Labor Review, July 2004. Income figures derived from 2000 US census data.

9. Copyright 2008 Dedicated Defined Benefit Services LLC 9 Retirement Plans for the “Micro-Market” Closing a Gap in Product Offerings SIMPLE SEP Single 401(k) DB DB + 401(k) Maximum Annual Contribution Limits in 2008 for a Business Owner Age 52, Earning $230,000 Annually, Retiring in 10 Years $46,000 $167,900 Assumes 5-7% funding rate for Defined Benefit Plans $51,000 $19,900 $133,600

10. Copyright 2008 Dedicated Defined Benefit Services LLC 10 OnePersonPlus from Dedicated DB A Great Tax Strategy for Baby Boomers!  Prospects Small Business Owner, age 45-70 Owner + up to 4 employees Expect to Contribute 5 successive years  New Plans Avg. annual contributions: $120,000 Avg. term: 9+ years Prototype plan documents Integrates with a solo 401(k)  Dedicated DB’s Service Easy to open, efficient to administer – 2-page adoption agreement, online proposal, forms, pre-filled annual census Experienced administration Advisors & CPAs at the center to the relationship

11. Copyright 2008 Dedicated Defined Benefit Services LLC 11 Dedicated Defined Benefit Services The leading provider of marketing, sales support & administration services for “micro-market” Defined Benefit plans  Offers an outstanding defined benefit solution to present to self- employed and small business clients  Creates a high-quality experience for financial and tax advisors and their clients -- from pre-sale through administration  Minimizes demand for technical expertise from Advisors & CPAs by providing expert plan consulting and design  Advisor/CPA support Expertise by phone – 866-269-2706 Expertise online - www.OnePersonPlusTDA.com

12. Copyright 2008 Dedicated Defined Benefit Services LLC 12 Dr. Charles, Owner-only, Age 52  Annual earnings: $400,000  Maximum DB+ 401(k) contribution for 2008: $167,900 Contribution to DB Plan: $133,600 Contribution to 401(k): $34,300  Annual tax savings: $63,800 Combined marginal tax rate of 38%  DB Accumulation at age 62: $2.2 Million 10 years, 5 - 7% rate of return  Annual DB Benefit: $185,000 Sole proprietor, Wants Maximum Tax Deduction

13. Copyright 2008 Dedicated Defined Benefit Services LLC 13 The Impact of Age on Contribution: The Older, The Better Doctor Charles  Age 52  10 Years to Retirement  Compensation: $400,000  DB Contribution: $133,600  Annual Benefit at Retirement: $185,000 Doctor Tim  Age 38  24 Years to Retirement  Compensation: $400,000  DB Contribution: $22,200  Annual Benefit at Retirement: $185,000

14. Copyright 2008 Dedicated Defined Benefit Services LLC 14 Management Consultants, C-Corp Married Couple in Business Together  5 and 7 years from retirement  W-2 Income: $460,000 ($230,000 each)  Total annual DB contribution: $314,400 $166,200 towards Paul’s retirement $148,200 towards Mary’s retirement  Annual combined income tax savings: $119,500  Accumulation at retirement: Paul: $1 Million Mary: $1.46 Million Paul, Age 60, Mary, Age 58

15. Copyright 2008 Dedicated Defined Benefit Services LLC 15 Mollie, Age 55 +2 Employees  Owner’s W-2 income: $400,000 Employee 1 age 28 earning $35,000 Employee 2 age 35 earning $45,000  2008 Maximum DB contribution for owner: $158,800 DB Contribution for Employee 1: $4,400 DB Contribution for Employee 2: $8,700 92% of contribution for Mollie  Annual income tax savings for Mollie: $60,300*  Retirement accumulation for Mollie at 62: $1.6 Million *Assumes 38% combined state/federal marginal rate Dentist, C-Corp

16. Copyright 2008 Dedicated Defined Benefit Services LLC 16 Walter, Age 56, Professor at Biz School In addition to university salary, Walter has self-employment income from consulting & serving on 2 corporate boards  Annual self-employment earnings: $150,000*  Maximum DB contribution for 2008: $150,000  Annual tax savings: $57,000 combined marginal tax rate of 38%  DB Accumulation at age 62: $1.2 Million 6 years, 5 - 7% rate of return * High 3-year average, after payment of self-employment taxes Wants to Secure Retirement with Side Income, Sole Proprietor

17. Copyright 2008 Dedicated Defined Benefit Services LLC 17 Eligible Compensation for a DB Plan

18. Copyright 2008 Dedicated Defined Benefit Services LLC 18  Identify ideal clients for defined benefit plans Typical Client Profiles Continuing Ed Training  Reach out to prospects Sales Kit - letters Client Brochures Quick or custom proposals to show estimated contribution and tax savings Working Together to Meet the Needs of Your Clients

19. Copyright 2008 Dedicated Defined Benefit Services LLC 19 Key Dates  DB Plans must be opened by the end of your client’s fiscal year, for most businesses that will be December 31 st.  Dedicated DB has a special Quick Adoption process for opening plans through year-end. Clients must sign Adoption Agreement by December 31 st and send with a set-up fee to Dedicated DB.  The Investment Account will be opened once the Adoption Agreement is signed.  Account must be funded when taxes are filed but no later than eight and a half months after the end of the fiscal year.

20. Copyright 2008 Dedicated Defined Benefit Services LLC 20 Fees Defined Benefit Plan  DB Plan Set up: $1200 plus $50 per participant  DB Annual Administration: $1600 plus $100 per participant OR Defined Benefit & 401(k)  Plans Set up: $1400 plus $50 per participant (owner and spouse only)  Annual Administration: $2050 plus $200 per participant (owner and spouse only)

21. Copyright 2008 Dedicated Defined Benefit Services LLC 21 Establishing a Plan 1.Contact me to Run a feasibility proposal 2.Introduce and Present Plan to client Dedicated DB available on a conference call Dedicated DB designs plan, calculates contribution number 3.Complete Set-up Questionnaire with Client Send signed Questionnaire to Dedicated DB With Set-up Fee 4.Client signs Adoption Agreement 5.Client opens the investment account