The document discusses strategies for combining defined benefit (DB) and defined contribution (DC) plans under the Pension Protection Act of 2006. It notes that the Act increases DB plan limits and repeals the combined limit when adding a DC plan if DC contributions do not exceed 6% of compensation. If they do exceed 6%, a combined 31% limit applies. The strategies presented maximize contributions to both plans within these limits.

1. Overview of the Pension Protection Act of 2006 as it applies to DB/DC combo plans

7. Plan Designs in Action

12. One HCE Design-Comp/Comp Age Comp PS Contribution Safe Harbor Deferrals Totals Dr. S A 68 245,000 25,150 7,350 22,000 54,500 Subtotal 245,000 25,150 7,350 22,000 54,500 PA1 B 58 70,000 8,400 2,100 0 10,500 PA2 B 48 70,000 8,400 2,100 0 10,500 Subtotal 140,000 16,800 4,200 0 21,000 Er Totals $385,000 $41,950 $11,550 $22,000 $75,500 Total ER % of Comp 10.90% 3.00% Owners % 72.19% 3% Safe Harbor plus 12% profit sharing contribution to everyone Dr. S's PS Contribution limited by 415

13. One HCE Design-Integrated Age Comp PS Contribution Safe Harbor Deferrals Totals Dr. S A 68 245,000 25,150 7,350 22,000 54,500 Subtotal 245,000 25,150 7,350 22,000 54,500 PA1 B 58 70,000 4,665 2,100 0 6,765 PA2 B 48 70,000 4,665 2,100 0 6,765 Subtotal 140,000 9,330 4,200 0 13,530 Er Totals $385,000 $34,480 $11,550 $22,000 $68,030 Total ER % of Comp 8.96% 3.00% Owners % 80.11% 3% Safe Harbor plus 6.67% to Rank and File (integrated basis) Dr. S's PS Contribution limited by 415

14. One HCE Design- Combo Design Age Comp CB Contribution 401(k) ER Contribution Deferrals Totals Dr. S A 68 245,000 120,000 0 5,500 125,500 Subtotal 245,000 120,000 0 5,500 125,500 PA1 B 58 70,000 2,100 8,400 0 10,500 PA2 B 48 70,000 2,100 8,400 0 10,500 Subtotal 140,000 4,200 16,800 0 21,000 Er Totals $385,000 $124,200 $16,800 $5,500 $146,500 Total ER % of Comp 32.26% 4.36% Owners % 85.67% • The Cash Balance Plan • The 401(k) Plan `100% to Class A limited to 415/or passing test `0% to Class A `3% to Class B `catch up salary deferrals `12% to Class B

16. Age Comp CB PLAN ER DEPOSIT DEFERRALS TOTALS HCE1 55 245,000 230,671 7,350 22,000 260,021 HCE2 42 110,000 11,000 3,300 16,500 30,800 HCE3 41 100,000 11,000 3,000 16,500 30,500 Subtotal 455,000 252,671 13,650 55,000 321,321 NHCE1 35 80,000 2,400 5,360 0 7,760 NHCE2 32 65,000 1,950 4,355 0 6,305 NHCE3 29 50,000 1,500 3,350 0 4,850 NHCE4 39 45,000 1,350 3,015 0 4,365 NHCE5 27 45,000 1,350 3,015 0 4,365 NCHE6 24 30,000 900 2,010 0 2,910 Subtotal 315,000 9,450 21,105 0 30,555 Plan Totals 770,000 262,121 34,755 55,000 351,876 Percent to HCEs 91.32% Percent of Compensation 38.55%