How SMBs can build 401(k) plans promoting recruitment, retention
Partnering with a retirement plan specialist can help you design a 401(k) plan that supports recruitment and retention efforts without causing more administrative work that takes away from focusing on growth.
What to consider when creating a 401(k) plan
When developing a plan, evaluating the expenses associated with each feature or requirement you elect is important in order to ensure you and your employees find an affordable option. Budget for startup costs, employer contributions such as a match or profit-sharing, and plan administration fees. You may have higher or lower costs based on the specific needs of your business, which can include the number of participants, turnover rates and average balances.
A banking partner experienced in benefit plan administration and financial planning can help you understand the newly offered tax credit for small employer pension plan startup costs from the IRS, which can cover up to $5,000 per year, for three years.
What to look for in a provider
When searching for a benefits provider, work with an institution with a specialized 401(k) team that understands plan offerings and how to manage choices, along with the expertise to create and administer the plan according to your unique and specific needs. A consultative advisor who understands the full picture of your business can help create plan options that both fit your budget and attract top tier job candidates, while also helping to educate your current employees, contributing to strong recruitment and retention that pays off for years to come.
As a business leader, you naturally wear many hats; but at the end of the day, you must focus on generating revenue. The right provider should administer your plan, ensure a seamless transition for employees and conduct a plan education program while making sure you are prepared to meet annual testing requirements. Be sure to verify that your 401(k) advisors are independent fiduciaries so recommendations are always made in your best interest.
Connect with an advisor
There are many benefits to collaboratively working with a team of stakeholders on a 401(k). However, business bankers can be a missing element and not always at the forefront for business leaders. They often have an ability to contribute in meaningful ways through:
- Personalized financial advice
- In-person consultative meetings
- Compliant fiduciary responsibility for recommendations
- Experts dedicated solely to 401(k)s
If you have a 401(k) plan in place, consider reaching out to current banking partners to assess their capabilities and if additional help is needed, consider reaching out to other professionals to find an expert willing to sit down and look at the details. Fully understanding the current plans, including the fees you and your employees are paying, can help identify opportunities for improvement beneficial to current employees and prospective job candidates.
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