The 2024 design window is open. Start now, not in December.

September 1 is not early for a retirement plan that is supposed to count for 2024. It is the first week in which an owner can still make a calm decision. The calendar from here to December 31 holds a limited number of payrolls, a limited amount of remaining compensation, and a limited amount of attention from the people who have to sign things: you, your CPA, your payroll provider, and an independent enrolled actuary. Sterling Pension Group, the third-party administrator in West Hartford, can coordinate that work. We are not the actuary. This briefing is education for a self-employed owner, a physician, a dentist, an attorney, or a consultant. It is not tax advice, legal advice, or actuarial advice.

Owners in their forties, fifties, and early sixties often hear a compressed version of the sales story in the fall. A cash balance plan, someone says, lets you set aside far more than a 401(k). That sentence is sometimes true and always incomplete. The 2024 employee deferral limit is $23,000. If you are age 50 or older by the end of 2024, the catch-up deferral is $7,500. The defined contribution annual additions limit is $69,000. The compensation a plan may count is capped at $345,000. The defined benefit annual benefit limit is $275,000. The IRA dollar limit is $7,000. Those figures are the 2024 cost-of-living adjustments in Notice 2023-75. They are the figures that govern a 2024 limitation year. The IRS has not released 2025 limits. Do not design a 2024 plan around a number you hope will appear later this fall. When the Service publishes the next table, it will appear on the COLA page for dollar limitations. Until that release, 2024 is the only set that counts.

A cash balance contribution is not one of those published limits. It is an actuarial result. Any dollar figure you have seen on a slide, in a calculator, or in a hallway conversation is illustrative unless an enrolled actuary prepared it for your census, your formula, and your assets. The $275,000 figure is a ceiling on the annual benefit the plan may promise. It is not a deposit you may wire because the calendar says September. Treating the benefit limit as a contribution cap is the fastest way to invent a number the plan cannot support.

What starting now actually means

Starting now does not mean signing a prototype on a Thursday and funding it on Friday. It means opening the four questions that take weeks rather than hours.

First, who is the employer? A consultant with no employees is a different census from a physician who employs clinical staff, a dentist who employs hygienists, or an attorney who employs associates. Related businesses matter. If you own a professional corporation and a billing company, or a practice and a separate company that employs the receptionist, those entities may have to be examined together. A plan drawn on one letterhead can fail if the other letterhead was ignored. The working pages for that question are the cash balance overview, the note on when a plan is not a fit, and the census briefing at /insights/census-first.

Second, what compensation will 2024 actually show? For an S corporation, the relevant pay is generally W-2 wages, and wages you have not yet run through payroll cannot be assumed into existence in December. For a sole proprietor or a partner, the figure is earned income, which your CPA computes. It is not the same number as deposits to the operating account. The compensation cap of $345,000 means pay above that amount drops out of many plan calculations. If your W-2 is going to be well below the cap, designing as if you will be paid $345,000 wastes the actuary's time and yours.

Third, what do you want the plan to do besides produce a deduction? A deduction is a result. The plan is a promise with a minimum funding obligation. For a calendar-year defined benefit plan, including a cash balance plan, the minimum contribution is generally due 8.5 months after year-end, which is September 15 of the following year. Miss that date and the excise tax reported on Form 5330 can be 10% of the unpaid minimum. The date on which you may still deduct a contribution is a different rule. Under IRC 404(a)(6), a contribution is often deductible for the year of the return if it is deposited by the due date of that return, including extensions. Those two dates are not the same date. Your CPA has to say which dates apply to your entity. A seminar slide should not equate them.

Fourth, do you need employee deferrals for 2024? This is the question that makes December a poor starting line. The SECURE Act generally allows a new plan to be adopted as late as the tax-filing deadline, including extensions, and still be treated as in place for the prior year. That rule is real. It is also the wrong reason to wait. Employee 401(k) deferrals generally cannot be made retroactively through payroll. Wages already paid, without a deferral election in place before the compensation was available, are not deferrable after the fact. If the plan is meant to include a 401(k), the remaining 2024 paychecks are the only paychecks that can carry a 2024 deferral. A design conversation that begins on December 20 cannot manufacture a $23,000 deferral out of one small payroll, and it cannot reach back to March.

The two clocks owners mix up

Think of the rest of 2024 as two clocks running at different speeds.

The deferral clock is fast. Each payroll that closes without an election is compensation you cannot defer. If you are paid monthly, only a handful of paydays remain, and only if payroll has not already run for September. If you are paid twice a month, you have a little more room, and you still do not have the paychecks that already cleared. Catch-up deferrals, for someone who is age 50 or older, add $7,500 on top of the $23,000. They are still deferrals. They still have to come from pay that has not yet been paid. They are not a cash balance credit, and they are not a contribution the business can invent next April.

The pension clock looks slower, and it is not actually leisurely. A cash balance accrual for 2024 can, in many cases, be documented under the SECURE Act adoption timing, with funding that follows the deduction rule and the minimum-funding rule rather than a magical December 31 wire. That legal possibility is why some promoters tell owners to wait until they see the final profit. Waiting for a final profit figure before you lock a deposit is prudent. Waiting to begin the design is not. An enrolled actuary cannot certify a contribution from a text message that says the year was good. The actuary needs a census, a compensation definition, a benefit formula, an interest crediting rate, and a clear picture of whether other plans already exist. Gathering that in September is ordinary professional work. Gathering it between Christmas and New Year's is how people invent a contribution. That mistake has its own briefing at /insights/do-not-rush-funding. The December sequence is at /insights/december-timing.

IRS Publication 560 is the Service's booklet on retirement plans for small businesses. It is worth an hour if you have never sponsored anything beyond a SEP or a simple 401(k). It will not compute a cash balance credit. It will remind you that a defined benefit plan, including a cash balance plan, is a promise to provide a benefit, and that the sponsor is responsible for funding the promise. The benefit-limit discussion the actuary will eventually apply is summarized on the IRS page for defined benefit plan benefit limits.

What a September scope looks like

A useful two-week scope is smaller than a finished plan and larger than a slogan.

You can list every worker who received, or will receive, a W-2 from any business you control, with date of birth, date of hire, and hours if anyone is part-time. You can tell your CPA which entities exist and which tax year they use. You can say, in one sentence, whether profit is stable enough to support a required contribution in a weaker year, not only in this one. You can decide whether you want a cash balance plan, a traditional defined benefit plan, or a 401(k) paired with a cash balance plan. Most owner designs that actually get adopted are a pair, because the deferral limit and the pension sit under different statutes. That comparison is the subject of /insights/combo-plan and /insights/db-versus-cash-balance.

You should not, in these two weeks, pick a contribution and move cash into a trust that does not exist. You should not tell staff they are receiving a new benefit before eligibility and the staff cost are known. You should not assume the Pension Benefit Guaranty Corporation stays out of the picture. PBGC coverage is plan-specific. Many small professional-service employers are exempt when the statutory conditions are met. Many other small employers are not. "We are a small practice" is not an exemption. The agency's coverage guidance is the right starting page: PBGC coverage.

If a rough sense of scale would help you decide whether the conversation is even worth having, treat every owner-credit figure as illustrative. The illustrations and the calculator are teaching tools. They are not a valuation. The published IRS figures, kept separate from those illustrations, are collected on the limits page. A fee conversation can wait until the design is real enough to price. It should not wait until December, when rush work is a poor bargain for everyone involved.

Roth catch-up is not part of this fall's decision

SECURE 2.0 includes a rule that would require certain catch-up deferrals to be made as Roth contributions. Notice 2023-62 delayed that mandate through 2025. It is not in force for 2024. It does not change a cash balance formula. It does not change the $23,000 deferral limit or the $7,500 catch-up limit. If your prior-year FICA wages exceeded $150,000, you will eventually hear about the Roth requirement, because it is scheduled to become an operational rule beginning January 1, 2026, and it will affect the paired 401(k), not the pension credit. For a plan you are considering this September, the correct sentence is shorter: the Roth catch-up rule is delayed, and it is not a reason to pause the design.

How the administrator and the actuary divide the work

Sterling Pension Group LLC administers plans and coordinates the independent Enrolled Actuaries who must certify the work a defined benefit plan requires. We are not an actuarial firm. We do not replace your CPA. We do not hand you a deductible number over the phone. The sequence that respects those roles is plain. You and your CPA describe the entities, the pay, and the tax year. We help frame a design a census can support, including the staff cost if you have employees. An independent enrolled actuary runs the valuation and, when the time comes, signs Schedule SB. Administration after adoption, including the Form 5500 filed on EFAST2, is the long middle of the plan lifecycle. A calendar-year Form 5500 is generally due July 31, and Form 5558 generally extends that deadline to October 15. You are not filing that form this month. You are deciding whether a 2024 plan should exist so that a later filing has something accurate to report. The IRS describes that filing regime in the Form 5500 corner.

Waiting for final profit is not the same as waiting to start

Final profit is a reason to keep the contribution flexible. It is not a reason to keep the design unstarted. By early September you usually know whether 2024 is a year you want a pension-sized deduction or a year you do not. If revenue is uncertain, or if a sale, a partnership split, or a long sabbatical is likely, the honest answer may be that a cash balance plan is not a fit this fall. A plan you cannot fund in a thinner year is a plan you should not adopt in a fat one. Minimum funding does not become optional because the following year disappoints. The briefing on who should walk away is /insights/not-a-fit.

If 2024 is the year, the work between now and the first of October is mostly information: census, compensation, entities, and a clear statement of how much staff cost you will actually tolerate. The work after that is the document and the payroll setup, still before the last paychecks. The funding, for many calendar-year sponsors, can be timed with the CPA against the return and, separately, against the September 15 minimum-funding date. Putting those steps in that order is the entire point of starting in September rather than in the last week of the year.

Owners sometimes ask whether a solo practice can skip the census conversation. Only if there truly is no other worker, no spouse on payroll, and no related employer. A one-person consulting practice can be a clean self-employed design. A practice that looks solo from the owner's chair and is not solo on the W-2s is a different case. September is when you find out which one you have. December is when you discover it too late to do anything careful.

What to do in the next two weeks

Do this work before the middle of the month, while the design window is still comfortable.

• Write down every entity you own or control, the tax form it files, and whether it has employees. Send that list to your CPA and ask which entities have to be considered together.
• Pull a year-to-date payroll register, or a year-to-date record of owner draws if you are not on payroll. Mark which paychecks remain in 2024. If you want a deferral near $23,000, plus $7,500 if you will be age 50 or older this year, ask payroll whether the remaining checks can carry it.
• List every person on those registers with date of birth, date of hire, and expected 2024 pay. Do not omit part-time staff, or a spouse who is on the payroll.
• Decide whether you are exploring a pension alone or a 401(k) plus a cash balance plan. Read the comparison of ordinary small-plan types before you pick a label from a brochure.
• Do not wire a contribution. Do not adopt a document you have not read. Do not use a 2025 dollar limit. The IRS has not published one.

When that packet exists, contact Sterling Pension Group and ask for a design conversation, not a funding number. Bring your CPA into the same conversation if you can. Two weeks of clean information in September is worth more than two frantic weeks in December.