There are seven absolutely fantastic 401(k) plan design elements that represent the perfect gift companies can give to their employees. Here they are:
1. Instant eligibility. Employers often put employees “on probation” when it comes to receiving benefits. That makes sense when there's a significant cost to the company (either out-of-pocket or via the accumulation of free-rider employees). But is it necessary in cases where the employee pays for the cost of the benefit? Maybe put a hold on the point when matching kicks in, but let them start saving for retirement from the get-go.
2. Offering a Roth option. Sometimes, the immediate tax deferral is worth less than the long-term tax deferral. That's certainly the case for employees in low tax brackets with decades of compounding returns ahead of them. This is a popular option with millennials.
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