6 Ways Implementing a 401(k) Retirement Plan Benefits Your Small Business

Implementing A 401(k) Retirement Plan for Small Business

Over the last 20+ years helping businesses choose benefit plans, there is one question we get asked the most: “Why should I go through the complexities of setting up a 401(k) retirement plan for my business, and how does my business even benefit?”

Our answer is always the same: “The return on a 401(k) plan to the business and employees is tremendous and far outweighs the cost and complexities! Everyone wins, and NO one loses.”

There’s no argument when it comes to determining if you need to set up a 401(k) retirement plan for your business. You do.

The business, business owners, and employees all benefit out of proportion to the time it takes to set up and implement a 401 (k) plan. Having a 401(k) plan is a win for everyone. The benefits are multifaceted and include fostering a loyal and engaged workforce, enhancing your ability to attract top talent, and strengthening your overall business foundation. Owners, management, and all employees benefit from being able to set aside money through arguably the best financial mechanism available.

Navigating your way through the intricacies of 401(k) retirement plans for small businesses can be simpler than you think. Before we tell you HOW simple it can be, note the advantages of setting up such a plan:

Financial Benefits:

Setting up a 401(k) plan allows the business to take advantage of a relatively low-cost plan that facilitates tax deferrals for all employees, business owners, and management. Deferred taxes mean more current revenue for all parties. Additionally, if a company includes a match or profit sharing, the business deducts those funds.

Low Administrative Burden:

Implementing a 401(k) plan includes the unique opportunity to avoid the high administrative costs of implementing other retirement plans.

Management of Fiduciary Liability:

Many businesses are wary of taking on fiduciary liability when sponsoring a 401(k) plan and perceive the risk of making a misstep in plan administration as a high probability. Although there are many areas of fiduciary liability, they are well-known and can be managed carefully.

Positive Reception By Employees:

It is relatively easy to educate, enroll, and manage employees in a 401(k) plan, and the opportunity to engage employees in securing their financial future is fulfilling, to say the least. Employees are excited to learn more about the advantages of retirement savings and appreciate an employer who works to create high participation, understanding and appreciation for the plan.

Compliance With Many State Laws:

More than 18 states now require employers to provide their employees with a retirement plan. As the number of state requirements grows, the complexity of using a state-sponsored plan for each of your employment states grows as well. Using a 401(k) plan eliminates the need to use complicated state-sponsored plans with variable requirements that are challenging to comply with.

New Exciting Features of 401(k) Plans:

SECURE 2.0 legislation brought many new features to entice employers and employees to sponsor and participate in a 401(k) plan. Features include an option to fund college loan repayments by the employer as an alternative to employer contributions, new auto-enrollment and auto-escalation features, different treatment of loans and hardship withdrawals, and much more.

One new feature includes a tax credit for small employers that enables them to claim a credit for part of the ordinary and necessary costs of starting a plan.

Leveraging Professional Expertise with a PEO

Making informed decisions about your company’s retirement plan isn’t a solo endeavor. Partnering with a Professional Employer Organization (PEO) like AdvanStaff HR provides access to a team of HR experts who can:

· Conduct a retirement plan needs assessment.

· Compare and recommend plan features to benefit your particular workforce as well as ownership.

· Streamline implementation of the best plan features for your group

· Absorb fiduciary liability

· Take over and manage all aspects of plan administration

· Combine 401(k) plan administration with related PEO service features such as payroll, benefits, and HR administration

Ready to strengthen your business with a strong 401(k) retirement plan?

By working with Advanstaff HR, you can leverage our expertise to implement a retirement plan that empowers your employees, strengthens your company culture, and sets your business on a path to long-term success. Our team can guide you through the feature selection process, ensuring that your plan is affordable for your business and fosters a sense of security and satisfaction within your workforce.

Ready to take the next step towards providing retirement benefits? Get a quick and easy quote here!