The Retirement Security Plan and Trust
A qualified Safe Harbor 401(k) retirement plan

Just the solution you have been searching for

Retirement Security Plan and Trust Fact Sheet (PDF)

Business Ownership: The American Dream!

How important are small businesses to the economy?

Small firms...

Represent 99.7 percent of all employers.
Employ half of all private sector employees.
Pay 44.3 percent of total U.S. private payroll.
Create 60 to u80 percent of net new jobs annually over the last decade.
Create more than 50 percent of non-farm private gross domestic product (GDP).
Supplied over 23 percent of the total value of federal prime contracts in Fiscal Year 2003.
Produce 13 to 14 times more patents per employee than large patenting firms. These patents are twice as likely as large patent firms to be among the one percent most cited.
Are employers of 39 percent of high tech workers (such as scientists, engineers, and computer workers).
Are 53 percent home-based and 3 percent franchises.
Made up 97 percent of all identified exporters and produced 29 percent of the known export value in Fiscal Year 2001.

Sources: U.S. Bureau of the Census; Advocacy-funded research by Joel Popkin and Company (Research Summary #211); Federal Procurement Data system; Advocacy-funded research by CHI Research, Inc. (Research Summary #225); Bureau of Labor Statistics, Current Population survey; U.S. Department of Commerce, International Trade Administration.

How many small businesses are there in the U.S.?

In 2003, there were approximately 23.7 million businesses in the United States, according to Office of Advocacy estimates.

The Internal Revenue Service (IRS) estimates there were 27 million business tax returns in 2003; however this number may overestimate the number of firms, as one business can operate more than one taxable entity. On the other hand, there are undoubtedly businesses that do not submit tax returns that may negate all or some of this overestimate.

IRS estimates the number of sole proprietorships (roughly equivalent to non-employers) increased by 2.4 percent in 2002 and by 1.9 percent in 2003. Census data show there were 5.7 million firms with
employees and 17.0 million without employees in 2001. Applying the sole proprietorship growth rates to the non-employer figures and similar Department of Labor growth rates to the employer figures
produces the 23.7 million figure. Small firms with less than 500 employees represent 99.7 percent of the 23.7 million businesses.

Source: SBA (Small Business Administration).

If you are not already one, you have a great opportunity to join the ranks of MILLIONS of creative, entrepreneurial, and courageous Americans. You can do it!

The Challenge to small business owners...

Financing a small business is the most difficult challenge for an individual. It is easy to get caught in the trap of taking on too much debt. It is also painful to pay taxes and penalties on withdrawals from retirement plan accounts.

A wide variety of solutions exist, but many are not practical. Some be cause they have not been tested, others because they have not been streamlined and automated. The biggest challenge is dealing with the regulatory compliance issues that can be paralyzing and overwhelming for the small business owner. In other words, do you want to be spending your time jumping through regulatory hoops or making a profit in your business?

The solution….

The independent professionals affiliated with IAG are acknowledged experts and have developed a solution that enables entrepreneurs to utilize their retirement money as a business capitalization source without incurring taxation or penalties, which normally occur when accessing 401(k), IRA and eligible retirement funds. This structure handles the tough fiduciary and regulatory requirements so you can focus on your business. This does not mean it will be easy, nor does it mean you will not have responsibilities. It just means the approved processes and structure can make it happen.

There are provisions within Federal Code that permit individuals to purchase “Qualifying Employer Stock” (meaning stock in their own corporation) with their existing retirement plan money. In other words, a person can invest their retirement money into an existing business tax and penalty free, grow the business, and eventually sell it down the road for a profit (hopefully) at retirement.

Our IAG professional affiliates are the top Financing, Tax and Safe Harbor Advisors in the country and have a fundamental focus and goal to assist prospective small business owners with solutions and strategies designed to help them realize their dreams of business ownership. If this sounds like what you are looking for, we can help you do it … and we can help you do it right!

The Retirement Security Plan and Trust (“RSPT”) is a qualified 401(k) plan that provides a way for individuals to finance their dream of business ownership. This is accomplished by performing a non-taxable roll-over transferring 401(k), 403(b), 457, IRA, pension and other eligible retirement plan assets into the Retirement Security Trust, which is subsequently used to purchase stock in a corporation.

The RSPT is ideal for individuals who want to purchase an existing, and are willing to follow a set of rigid procedures to do it right. The RSPT has obtained a favorable determination letter from the Internal Revenue Service, and employs an expert/professional trustee, and seeks in every way to strictly adhere to all associated regulation required to claim exemptions to certain Federal rules, without such, would prevent such a transaction from taking place. This is where the unique expertise of our associated professionals makes the difference.

How it works:

The following is a simple explanation of the steps a person must go through to use their 401(k), IRA or other retirement assets to purchase an existing business:

A due-diligence interview occurs with a trained representative of the Trust.
Following the initial interview, if all parties agree (“all parties” mean you, your legal and accounting advisors, the principals at the trust, etc.) that the RSPT is a prudent solution, paperwork is then completed, and a deposit is made to begin the process.
The details of the purchase are worked out between yourself, your advisors and the seller.
Data (financial and other) on the existing business is obtained, reviewed, investigated and then given to an independent business appraiser to determine a Fair Market Value for the business.
No more than 30 days prior to the closing of your business, your funds are rolled or transferred from your current plan into the RSPT. Funds will reside in the Trust Account for no more than 30 days (the account is not an interest bearing account) until the closing date—at which time the amount required to fund the transaction is wired to the appropriate account. Any excess funds will be invested in the RSPT mutual funds selected by the plan’s Registered Investment Advisor. The balance of the fee will be paid to the Trust administrators at this time.
Stock certificates are prepared by you or your legal counsel, and forwarded to the Trustee of the plan.
After the transaction, you will be contacted by one of our associates to get you and your employees enrolled and set up to make new and ongoing 401(k) contributions. The plan is a safe harbor plan, so you WILL be required to match your employee’s contributions.
Congratulations...you have just accomplished a very significant and valuable transaction. Using your retirement funds to purchase an existing business and take control over your financial destiny.

What responsibilities do I have?

You are required to obtain an initial fair market valuation (appraisal) of the business you will be purchasing.
You will be required to enroll ALL of your qualifying employees. The plan provides for immediate eligibility.
You will be required (within a reasonable period of time) after your transaction to begin submitting payroll and contribution information to the trustee (along with contribution dollars). We will show you how this is to be done.
You will be required to match a portion of your employee’s contributions (if they make any).
You will be required to distribute communications, summary plan descriptions, and other updates/communications to your participants from the RSPT’s trustee.
You will be responsible for paying the monthly administration and operational expenses associated with plan management.

How much can be saved by using the RSPT?

Because everyone is unique, you must speak with your tax/legal advisor to determine the exact initial savings. However, as an example, if you were to rollover $100,000 to the RSPT, and assuming you were in the 28% tax bracket, your savings would be as follows:

($100,000 x 28% = $28,000 & $100,000 x 10% (penalty if applicable) = $10,000 & $100,000 x state income taxes if applicable)

In this example, the initial savings would be $38,000 plus any state or local income taxes. The reality is that tax and penalties can rise as high as 50% on amounts distributed from retirement accounts. As you can see, these savings provide an attractive incentive to use the RSPT.

Ready to proceed?

If you:

Desire to invest in yourself;
Desire to use your retirement assets in the most tax efficient way possible;
Desire to continue building your retirement assets; and
Desire to and WILL follow procedures designed to maintain ERISA & IRC regulatory compliance,

Then:

Contact a IAG representative today and ask about the Retirement Security Plan and Trust!

International Acquisition Group
1925 East Beltline Rd. Suite 503
Carrolton, TX 75006
Phone 972-331-7540 / Fax 972-980-0219