Retirement plans are no longer one size fits all. Most people have heard of a 401(k) plan as an employer-sponsored retirement plan. The basic 401(k) allows eligible employees to make pretax elective deferrals or post tax “Roth“ contributions through payroll deductions. This typically allows the employers to defer more each year than they could in a Simple 401(k) or in an IRA. However, retirement plans are so much more today. In addition to the employee deferral features, a retirement plan may provide discretionary employer match, as well as profit sharing contributions and Safe Harbor options. Even the old Pension plan has been given new life in the form of a Cash Balance Plan. We are happy to also help in the administration of 403(b) and 457 plans, and can even provide 3(16) services. Atlantic Pension Services, Inc. can design a plan structure which will start getting employees excited about retirement again.
Retirement plans are a good attraction and retention tool as 70% of plans offer some kind of match. According to Workforce, 51% of employees joined their current employer mainly because it offered a retirement plan. In addition, 90% of employees age 18 to 34 prefer an increase in benefits to additional pay. According to the Addison Group 78% employees will remain with an employer with a robust retirement plan.
401(k) allow higher contribution limits and greater plan design flexibility
Deductions are through payroll and happen on an automatic schedule.
No one can perfectly time the market, so consistent deferrals ensure a favorable price.
Money invested is not taxed until it is withdrawn and in the case of Roth investments no further taxes are ever assessed after it is deposited in the retirement account.
Employees who are able to retire on time reduce both employer’s healthcare and workman’s compensation insurance costs.