It's obvious that retirement benefits are increasingly significant to job applicants. Many workers inquire during the job application process whether a company offers a retirement plan, such as a 401(k). This helps them seriously evaluate whether to accept or continue in a job.
As a business owner, retirement plans allow you to obtain a tax credit for startup administrative expenditures. There may also be tax advantages to offering an employer-matching contribution. It depends on the type of 401k plan you have and the related IRS guidelines.
The SECURE Act allows a small business meeting certain criteria to receive a tax credit for implementing a new 401(k) plan and/or automatic enrollment feature.
Profit-sharing contributions can be distributed among 401(k) plan participants using a variety of formulas. The most adaptable formula is new comparability. It enables an employer to assign varied contribution rates to different employee groups or even to each employee. You can use this option to award higher contribution rates to Highly-Compensated Employees (HCEs) or to reward high-performing employees.
Employees who invest in their future through retirement plans may be less likely to leave their current workplace — especially if employers match contributions or provide additional value, which increases an employee's total compensation.
Adding a 401(k) plan to your comprehensive benefits package, regardless of the size of your business, can benefit both you and your staff. So, your organization needs to review its present benefits and maybe alter what it offers to employees.
At Options 401k, we simplify the process and allow business owners to focus on their operations by offering personalized 401(k) plans, including auto-enrollment and compliance support. Reach out to our team for all your 401k needs so that we can help implement them for you. Get started today.