Attention Plan Sponsors:
How Do You Know That You Are Looking at the Perfect 401(k) Plan for You?
The secret is out – or is it? The secret is no two 401(k) plans are the same. While they all serve a common purpose to help you save for retirement, they do not all provide the same benefits
and features.
As an EMPLOYER your goals are usually 3-fold: (1) attract the best employees possible, (2) retain those employees, and (3) reward those employees.
What Makes a 401(k) Plan Great?
Several things make a great 401(k) place. Below are the features that make a 401(k) plan truly great are below.
- ELIGIBILITY/ENROLLMENT
A great 401(k) plan allows employees to begin saving immediately.
However, some EMPLOYERS design a 401(k) plan that makes new employees wait until they have been employed at least 3-12 months before entry and at least 18 years old.
- MATCHING CONTRIBUTIONS
A great 401(k) plan offers an above standard match for employee contributions and 100% immediate ownership of the matching dollars.
For instance, many EMPLOYERS offer 23% of the first 4%- 6% of earnings OR even lower matching contributions. Further, these plans may force employees to wait up to 3 years to even receive any match from their employer.
- ROTH CONTRIBUTIONS
A great 401(k) plan allows for pre and post [Roth] taxed savings options.
These funds all grow tax-deferred, and the Roth funds are never taxed if left in plan for a few years.
- INVESTMENTS
A great 401(k) plan has an assortment of quality funds to choose from, including target date funds, managed accounts, risk-based funds and a good stable value fund.
- ADVISOR
A great 401(k) plan has an Advisor who reviews the fund quarterly or semi-annually to ensure that the best funds are being offered or changing them when necessary.
A great 401(k) plan has an advisor who offers ongoing meetings for new and current employees to assist them in their quest for a financially safe and secure retirement.
A great 401(k) advisor is always there to help the participants “to and through retirement.”
Conclusion
The employment landscape is meant to benefit employees. Therefore, employers must compete for excellent employees. One way to compete is to ensure you are offering the best 401(k) plan with great benefits and features.
Speak with a qualified retirement plan financial adviser about your retirement savings options as a business owner. Learn about your options and how you can offer better benefits, without costing you a lot money. Contact Scott Tanker at 609-922-0201 to learn more.