Understanding Business Retirement Plans

Employees in large companies have often enjoyed a range of additional benefits alongside their annual salary, such as healthcare and pension plans. However, lots of smaller business owners are realizing that offering benefits like a good business retirement plan could be a great way to attract and keep the kind of employees that will be a real asset to their organization. Plus, with the tax advantages and various plans that are now available, they are a lot easier and less expensive to set up.

• Costs of business retirement plans
• What other companies are looking for

Employee Retirement Plans

Businesses can play an important part in helping their workers prepare for life after employment by providing them with an effective retirement plan that they can contribute to while they are working. There are different types of IRA-based, defined contribution, and defined benefits plans that allow companies of all sizes to support their employees' planning for the future.

Things to Consider

For most small businesses, and even for individuals who are self-employed, taking advantage of some of the different business retirement plans that are available is a prudent way to plan for the future. If you’re starting to look into providing retirement plan benefits for your employees, here are some of the things you might want to think about:

Type of plan: Most people are familiar with the idea of an IRA or a 401k, but when you’re looking at providing a retirement plan for your employees, there are several types of 401k for small businesses and a number of IRA-based plans, each of which could provide you with different benefits. It’s important to consider the different plans available to make sure you choose the right one for your business.

Costs: In addition to any costs to your business to set up and maintain your retirement plan, you also have an obligation to your employees to make sure you select the best option based on the fees and expenses for managing the investments in the plan. Another piece your business needs to discuss is whether your chosen plan is going to require you to make contributions, like a 401k employer match plan.

Management: Some retirement plans may need you to be fairly involved in the management of the plan, requiring regular reports and information from your business, while others need a lot less paperwork and allow you to be more hands off. There will always be some work involved in providing a business retirement plan, but selecting the right one will make sure the benefits outweigh the extra paperwork.

Prices paid for business retirement plans

After $1,000 set up, only $65 per month. More details for each employee.

- Buyer from Saint Louis, MI

$1500 per year annual service fee.

- Buyer from Madison, CT

Annual base record-keeping fee is $750.00 plus $20.00 per active participant. The fee for preparation of the Form 5500 is $300.

- Buyer from Colorado Springs, CO

What others are looking for...

We would probably start the plan without any company match, but would plan on adding a company match after a year or two.

- Manufacturing Industry, Painted Post, NY

We would like to compare a variety of retirement options for our employees.

- Transportation/Logistics, Tangent, OR

I will be opening for business in 2 months and would like to offer all new employes a savings plan.

- Restaurant Industry, Silver Spring, MD

Looking to expand our business and want to give our employees health insurance and 401K plan. Need some advice.

- Business Services, Somerdale, NJ

Starting up a new business and want to offer employees retirement plans.

- Manufacturing, Anchorage, AK

Willing to give a 6% company match. The need is for an affordable 401K plan for the company, while keeping low administrative costs. Submitting 401K information must be as easy as possible.

- Business Services, Murfreesboro, TN

We are a management company with multiple properties looking to provide employees with a retirement plan.

- Real Estate Industry, Des Plaines, IL

We are a small business looking to offer a 401K for our employees.

- Non-Profit, Tulsa, OK