McKinsey U.S. Retirement Plan Flashcards
Can you tell me more about PSRP/MPPP/PCBP?
For simplicity, you can think of PSRP and MPPP as your company 401(k).
In 2023, you may contribute up to $22,500 ($30K for 50+) to PSRP and McKinsey will contribute $42,900 on behalf of you into both PSRP and MPPP. That leaves just $600 of after-tax voluntary contribution that you can make into your PSRP without breaching the annual IRS limit ($66K).
PCBP is a tax-deferred pension that’s only funded by the Firm each January. It’s a carve out from your December AA, and the Firm contributes $39,600 each year. You don’t really have much to do as the investment is fixed as 60% Special Situations, 20% Passive US Equities, and 20% Passive Non-US Equities. Once you leave the Firm, you may roll over PCBP into your PSRP to simplify your accounts and to manage the investment options.
How do Firm Shares work?
As a newly elected Partner, you must either buy-in or finance $75K worth of Firm shares. They have historically appreciated ~30% each year, and you may only cash them out when you leave the Firm.
Once you’ve built enough Firm shares balance (minimum: $75K for Citi, $25K for HSBC), you may borrow against the full value of the shares, typically made available within ~3 weeks.
What happens to the PSRP/MPPP/PCBP once I leave the Firm?
Once you leave the Firm, you may keep those accounts as is. However, we generally recommend you to consolidate your MPPP and PCBP accounts into your PSRP to simplify the account management and control the investment option, which isn’t available in PCBP.
Additionally, by consolidating the accounts into PSRP, you may execute in-plan Roth conversions, which is only available in PSRP.
How will the PCBP be paid out?
