Here are answers to some common questions. Please check for your question below. If your question isn’t listed, don’t fret! Just contact us and we’ll answer your more unique query ASAP.
Pango Financial®, the lowest cost provider in the industry, offers complete online customer access for entrepreneurs and small businesses. The DreamSpark plan allows you to unlock your retirement savings to invest in your business tax deferred and penalty free. In addition, you can save up to $1,000 compared to our competitors. Our goal is to make the funding process of your business as simple, helpful and beneficial as possible at the lowest possible price without compromising value. You will receive a free incorporation and free registered agent services for the first 12 months. See the DreamSparkTM difference for yourself! Put our online systems to work—on your laptop, desktop or smart phone.
- Access your account online 24/7
- Toll-free customer service 1-855-WHY-PANGO (1-855-949-7264)
- Business forum to connect to your peers and fellow entrepreneurs
We are a member of the American Society of Pension Professionals & Actuaries, International Franchise Association and International Business Brokers Association. Best of all, we guarantee your satisfaction in our commitment and service process.
Our smart online tool is easy to navigate and will guide you step-by-step through the DreamSpark® plan creation.
- Pango Financial® will establish a new C corporation. The business sponsors a new qualified retirement plan where you roll over your current qualified retirement plan funds, such as IRAs, 401(k)s, etc.
- For the new plan, you choose either a profit sharing or a 401(k) plan. You can review the features and benefits of each to help you decide which one is right for your business.
- You determine how much of the rollover funds to invest into the stock of your new business. You can also choose to diversify your portfolio. Pango Financial will never hold your retirement funds. We are here to offer our expertise in plan design and compliance.
- You will then purchase stock for working capital in your business. This investment can be used for any legitimate business expense including salaries, rent, employee benefits, inventory, marketing, or equipment.
- The DreamSpark® plan is established allowing you and your employees to continue to save for retirement.
- You can access your DreamSpark® plan online 24/7 with ease and convenience.
Our DreamSpark® plan meets the IRS requirements for qualified retirement plans. IRS regulations permit the rollover of funds from qualified plans to qualified plans without taxes or penalties. With the DreamSpark plan, you will set up a qualified retirement plan, which is then available to all eligible company employees and permits investment in the stock of the sponsoring employer. Compliance is imperative to maintain the benefits of your DreamSpark® plan. Pango Financial® can ensure that the initial DreamSpark plan compliance continues each year through our annual maintenance program.
The incorporation, plan setup and investment are usually completed in 2-3 weeks in most states. Please be aware that each state has a different turnaround time for incorporation services. Pango Financial®, at no additional charge, will expedite your incorporation with the state of your choice. The only exception is in the state of California where the expedited fee will apply.
Pango Financial® builds value and affordability into the creation of the DreamSpark® plan and its ongoing maintenance. Our one-time setup fee of $3,995 includes:
- design of your DreamSpark® plan
- free preparation and filing your articles of incorporation
- free registered agent services for the first 12 months
- free certified business valuation for new businesses
- applicable state incorporation filing fees
- state expedited fees (with the exception of California)
- application for Employer Tax and Retirement Plan ID numbers
- corporate record book template
- samples of company bylaws and corporate minutes
- bank account instructions to set up your plan and corporate bank accounts
- stock certificates, calculation and issuance
Pango Financial will be happy to manage your plan maintenance for you for $110 a month. You’ll also have plan online access 24/7.
We help you stay up-to-date with IRS, DOL and ERISA requirements. This includes preparing your form 5500, compliance testing, documentation maintenance, plan reconciliation, participant statement preparations, vesting and eligibility tracking. Pango Financial, as part of the monthly maintenance services, will also help you continue building your retirement savings with a variety of different plan designs based on your current employee participation and financial goals of your corporation.
No, Pango Financial® will never receive a commission on your investment. We charge an affordable flat setup fee of only $3,995 for our services. In addition, we will manage the ongoing maintenance of your plan for $110 a month.
Pango Financial® accepts most personal or business credit cards for the DreamSpark plan setup and ongoing maintenance fee. Please be aware that these funds cannot be paid directly out of the retirement funds. Contact your accountant for advice on reimbursing business expenses including the DreamSpark plan.
Yes. You can roll over as many qualified retirement accounts as you would like. This also applies to any eligible participant of your DreamSpark plan.
Yes, friends and family are permitted to participate in the DreamSpark® plan as long as they are employees of the business under the exemption to “prohibited transactions”.
The following retirement accounts are ineligible for your DreamSpark® plan:
- ROTH IRAs
- 457 plans for non-governmental agencies
- non-spouse death benefits from an IRA
If you are leaving your current employer, upon termination you can rollover your 401(k) to your DreamSpark® plan. If you are maintaining employment with your current employer in addition to working for your new C corporation, you may be able to take an in-service distribution. This is not a plan loan. Be sure to check with the retirement plan administrator or review the Adoption Agreement that governs your employer sponsored retirement plan for additional information.
Yes, as an employee of the business you can draw a salary upon your date of hire. You are required to be paid as a W-2 wage earner to participate in the DreamSpark® plan. Your tax advisor can provide assistance in setting up your payroll withholdings for all employees.
- A discretionary profit sharing plan allows you, the employer, to choose from year to year how frequently and how much to contribute.
- Each year the employer is able to contribute up to 25% of eligible wages in the form of a profit sharing contribution. This contribution is tax deductible to the corporation.
- Federal and state government taxes are deferred on all profit sharing contributions until otherwise distributed.
- A profit sharing plan is a great way to engage and retain top talent. The employee is required to earn eligibility and vesting, which helps retain valuable employees.
The DreamSpark® plan can be used to invest in any type of business that offers a product or service. This includes franchise opportunities, existing businesses and startup opportunities. The business cannot be a pass through entity or passive investment company. The business has to be a C corporation that you are an employee of and sponsors the DreamSpark® plan.
Yes, your C corporation must obtain an appraisal under adequate consideration from a certified business appraiser whenever your DreamSpark® plan or another investor purchases non-publicly traded employer stock. The DreamSpark plan includes the initial third party valuation for the first purchase of stock in your new C corporation. If you are investing in an existing C corporation, a third party valuation will need to be obtained by you from a certified business appraiser. Your accountant may be able to assist with this service.
A C corporation is the only business structure allowed by the Internal Revenue Code and ERISA when sponsoring a DreamSpark® plan. You cannot use the DreamSpark plan to invest in your business if your corporation is established as a sole proprietor, partnership, S corp., LLC, non-profit or professional service corporation.
For 2023, employee contribution limits are $22,500 for most workers or $30,000 for workers age 50 or older including a $7,500 “catch-up” contribution. The combined contribution (employer’s and employee’s) may not exceed $66,000 ($73,500 including catch-up contributions if over 50) or 100% of the employee’s pay.
Pango Financial® understands that your accountant may not be familiar with our DreamSparkTM plan. We have provided resources for your accountant to help educate them on the requirements related to establishing and maintaining a compliant DreamSpark plan. If your accountant has additional questions a member of the Pango Financial team can provide assistance.
The C corporation is an independent entity and pays corporate taxes on the profits of the business. When dividends are paid to shareholders the dividends are considered taxable income to the individual. One of the ways to reduce corporate tax liability is by contributing to your DreamSpark plan. Your qualified tax professional can also advise you of other allowable deductions that can be made by your C corporation including all legitimate business expenses.
Yes, any employee that meets the eligibility guidelines for the DreamSpark® plan must have the option to participate in order to comply with IRS non-discrimination requirements.
The Employee Retirement Income Security Act of 1974 (ERISA) established the regulation that allows for a private company to use retirement funds as business capital through an Employee Stock Ownership Plan (ESOP). Large companies have used ESOPs to invest retirement dollars as working capital for years.