Talk:Profit-sharing pension plan

Thoughts on rewrite (August 2022)

The main task in this rewrite is finding sources. The article is outdated and also uses some unnecessarily convoluted explanations. While policy and guidelines discourage simplifying, especially to a technically incorrect level, explanations that are weirder and more confusing is likewise unencyclopedic. I imagine the average reader would like to walk away with a basic working knowledge of profit sharing plans (PSPs).

My proposed rewrite is as follows:

In the United States, a profit sharing plan is a type of defined contribution plan whose retirement benefits are usually funded exclusively by the employer. Depending on the plan provisions (as outlined in the plan documents), employer contributions can be discretionary, meaning the employer decides whether to contribute and how much. Failing to contribute many years consecutively may disqualify the plan, resulting in taxes on contributions and earnings, interest on those taxes, and penalties. Unlike a defined benefit plan, a profit sharing plan does not guarantee participating employees a certain benefit—it instead depends on the investment gains and losses on any contributions from the employer. Profit sharing plans are instead defined contribution plans and thus not insured by the PBGC. Plans that cover non-owner employees are subject to ERISA. As with other qualified retirement plans, contributions to profit sharing plans must be allocated among participants per the IRS's annual testing requirements.

Pure profit sharing plans do not allow employee contributions, but some 401(k) plans allow profit sharing contributions or non-elective contributions (to differentiate them from employer matching contributions). In these 401(k) plans, the employee salary deferrals are segregated from the employer contributions. Employers may make a safe harbor non-elective contributions, special kind of non-elective contributions that allow the plan to automatically pass certain annual testing requirements.

Employers can deduct profit sharing plan contributions on their tax returns. Historically, profit sharing plans have had lower deduction limits than money purchase plans, another kind of defined contribution plan, but {effective [date] | with the [legislation] passed [date] | as of [date]}, the limits for both plans are the same. This has led to more employers adopting the more flexible profit sharing plans instead of money purchase plans, which do not allow discretionary contributions and require employer contributions based on percentages of participants' gross compensations.

I'll chew on this for a bit and see how it goes. Rotideypoc41352 (talk · contribs) 04:44, 30 August 2022 (UTC) with edits 16:54, 2 September 2022 (UTC) and 02:19, 3 September 2022 (UTC)

Requested move 17 September 2022

The following is a closed discussion of a requested move. Please do not modify it. Subsequent comments should be made in a new section on the talk page. Editors desiring to contest the closing decision should consider a move review after discussing it on the closer's talk page. No further edits should be made to this discussion.

The result of the move request was: Not moved. As for whether Profit-sharing plan should become a dab page, there is no consensus, but it has been strongly contested and thus should be formally discussed at RfD. No such user (talk) 13:30, 11 October 2022 (UTC)

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Profit-sharing pension plan → Profit-sharing plan – Neither Department of Labor nor IRS (Special:Permalink/1110535973#External links) use "pension". Rotideypoc41352 (talk · contribs) 01:40, 17 September 2022 (UTC) — Relisting. Extraordinary Writ (talk) 18:32, 27 September 2022 (UTC)

This is a contested technical request (permalink). Steel1943 (talk) 16:41, 17 September 2022 (UTC)

Contesting this for the simple fact that Profit-sharing plan is a redirect towards Profit sharing, which is not the page requesting to be moved. In addition, Profit-sharing plan has targetted Profit sharing since it was created in 2008. For this reason alone, the move request is not technical in nature. Steel1943 (talk) 04:19, 17 September 2022 (UTC)

Searching the title with "pension" (DuckDuckGo, DuckDuckGo "pension") show very few pages that discuss any topic in-depth. Instead, in many results, the phrase forms a part of a proper noun (i.e. the name of a specific plan sponsored by a specific employer), not the common noun for the type of plan. Searches for "profit sharing plan" (DuckDuckGo) yield few results not about the type of retirement plan in the U.S. and many more that discuss the plan in-depth. Rotideypoc41352 (talk · contribs) 13:13, 17 September 2022 (UTC)

@Rotideypoc41352: I moved this to full discussion due to the above comment, which probably needs to be evaluated by the community. Steel1943 (talk) 16:43, 17 September 2022 (UTC)

Sounds good, thanks! Rotideypoc41352 (talk · contribs) 17:04, 17 September 2022 (UTC)

Note: WikiProject Law has been notified of this discussion. Rotideypoc41352 (talk · contribs) 13:54, 18 September 2022 (UTC)

Note: WikiProject United States has been notified of this discussion. Rotideypoc41352 (talk · contribs) 13:54, 18 September 2022 (UTC)

Note: WikiProject Business has been notified of this discussion. Rotideypoc41352 (talk · contribs) 13:54, 18 September 2022 (UTC)

• Comment: Three comments, actually. 1. In American usage, “profit-sharing plan” is standard. However, “profit-sharing pension plan” is not a weird construction. 2. I’m not familiar with international usage, or if these plans are even found in non-American contexts, so I don’t know whether using the American term is too parochial. 3. The redirect of profit-sharing plan to profit-sharing is clearly inappropriate. If profit-sharing pension plan is kept as the article name, then profit-sharing plan should either redirect to that article or be changed to a disambiguation page. John M Baker (talk) 03:52, 19 September 2022 (UTC)

Thanks for sharing your thoughts, John M Baker. To clarify my thought process to the closer: I am assuming the scope of the article is the U.S. retirement plan. Rotideypoc41352 (talk · contribs) 04:52, 20 September 2022 (UTC)

• Oppose move, and also oppose change of target for profit-sharing plan. This is not a generic plan which shares profits, as described by profit sharing, it is a specific concept which relates to pensions specifically. If this were a proper name, I might think differently, but it's in sentence case and therefore a descriptive title so should actually be descriptive of what it is.  — Amakuru (talk) 10:41, 6 October 2022 (UTC)
• Nominator here, cleaning up and putting everything in one place: profit-sharing plan is overwhelmingly the common name for this specific type of retirement plan (not a concept). The search engine results (from DuckDuckGo and Google) linked in my replies to Steel1943 above show that those writing about the plan usually use profit-sharing plan instead of profit-sharing pension plan. This is the crux of this RM.

Incidentally, the U.S. government itself (specifically the IRS and the Department of Labor [DoL]) agrees with this usage. As an even more minute point, even the law—IRC § 401(a) (Internal Revenue Code)—itself says profit-sharing plan.

While enwp articles are not always titled after the official name, the search engine results make the official name a strong contender for the common name. The official sites of the U.S. government are public-facing sites, providing information on tax benefits (IRS) or employee rights (DoL) to the lay public. They are using the common name (instead of obscure technical terms) because otherwise, they would confuse the general public.

tl;dr people inside and outside government communicating to the public about the U.S. retirement plan overwhelmingly use profit-sharing plan as reflected the search engine results linked in my replies above to Steel1943. Rotideypoc41352 (talk · contribs) 11:29, 7 October 2022 (UTC)

• Oppose. A "profit-sharing plan" or simply "profit sharing" is something that happens regularly, like once a year or so, and is not something that employees have to wait for until they receive a pension in retirement. That would be the subject of this article, which is about an agreement maintained by the employing company to share a portion of company profits with its employees when they retire and start collecting a pension. Those are two very different notable things covered distinctly by two different articles on Wikipedia. So I agree with Amakuru that there should be no page move, and the profit-sharing plan redirect should continue to target the article about profit sharing. Hatnotes suffice. P.I. Ellsworth , ed. ^put'r there 04:58, 10 October 2022 (UTC)

The discussion above is closed. Please do not modify it. Subsequent comments should be made on the appropriate discussion page. No further edits should be made to this discussion.