Some clients and advisors now can contribute $100,000 plus to these plans.

You know those 40-something and older individuals who have woefully undersaved for retirement? Financial advisors now have what may seem like an unlikely tool to help some of them catch up fast and defer thousands in taxes.

The tool-a defined benefit plan-allows some high-income small business owners who usually are 45 or older to stash more than $100,000 annually and deduct the contributions on their income tax returns.

That compares with a maximum annual contribution in 2004 of $41,000 ($44,000 for persons 50 and over) to 401(k) plans. The maximum contribution includes a combination of $13,000 ($16,000 for 50 and over) in employee contributions and the rest contributed by the employer.

Recent tax law changes and new one-stop shopping programs offered by financial services companies have made defined benefit plans more attractive and easier to implement and maintain for small businesses.

High-income business owners employing only themselves may benefit the most from the plans. That's because they can put away large amounts for themselves without having to make contributions for other employees. Still, the new packaged programs are cost-efficient and simple enough to appeal to small businesses with as many as five employees, observers say.

Many financial services companies-among them Pioneer Investments, The Hartford Financial Services Group and UBS AG-are offering the programs by partnering with Metavante Corp., based in Milwaukee. The companies provide investment choices while Metavante provides actuarial and administrative services.

Metavante's services typically cost $1,500 annually plus $100 per participant. There's also a one-time setup fee of $1,200 and $50 per participant. Chip Swearngan, Metavante's director of investor and public relations, says seven firms currently are marketing its OnePersonPlus plan-introduced in October 2002 for businesses with one to five employees-and it is continuing to sign up more institutions.

Although firms like UBS and The Hartford have offered defined benefit plans for many years, they believe these new packaged programs, only available through financial advisors, will better serve a niche-highly compensated small business owners-and bring in new business.

"Metavante partnered with a consulting firm that just really saw the need for these small defined benefit plans, and they put together a Web site for financial advisors and went around and said, 'Here's the program.' We realized it would make it so much easier and partnered with them," says Joanne Carter, UBS' corporate vice president of retirement consulting services.

Other financial services companies also offer services to help advisors set up defined benefit plans for small business clients. For example, Charles Schwab & Co. offers The Schwab Personal Defined Benefit Plan, which allows advisors to establish plans for clients who are high-earning, self-employed professionals nearing retirement, able to contribute $60,000 or more per year and have one or no employees.

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