Designed to favor older employees (who are often the businessowners and other key employees), age-weighted profit sharing plans use a "discounted present value analysis" to determine each participant's relative share of the employer's total contributions. A "formula of allocation," which considers the difference in each participant's time to retirement and salary, is used to determine individual participant allocations. Age-weighted profit sharing plans will be especially attractive to small businesses in which the owner and/or other key employees are significantly older than the non-key employees.
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