Employees are the greatest asset that a company can have. Therefore, it’s important to provide valuable benefits that attract and retain talent. Retirement benefits are one of the most important benefits an employer can offer. Where do you start when choosing a retirement solution?
There are many types of benefit plans, including:
- Payroll Deductions IRAs
- Simplified Employee Pensions
- SIMPLE IRA Plans
- Profit Sharing Plans
- 401(k) Plan
- Safe Harbor 401(k) Plans
- Automatic Enrollment 401(k) Plans
- Defined Benefit Plans
Retirement savings plans can offer many benefits to employers, such as tax advantages. Benefits include tax deductible contributions, tax-free asset growth, tax credits and other incentives for starting a retirement plan and flexible plan options.
Sponsoring a retirement plan has four stages: Choosing, Establishing, Operating, and Terminating the plan. Tax professionals can help at all four stages, but in the operating phase, tax professionals are vital when it comes time for necessary requirements and reporting.
You’ve established a retirement plan for your employees. Now what? Because employee benefit plans are regulated entities, annual reporting obligations may apply. It’s important to follow audit requirements associated with benefit plans, which varies based on the type of plan. The Employee Retirement Income Security Act (ERISA) requires annual audits of plan financial statements by an independent qualified public accountant. Generally, plans with 100 or more participants are subject to the audit requirement.
Avoid operational mistakes by frequently reviewing your plan. Common mistakes sponsors make include:
- Making contributions incorrectly
- Calculating contributions incorrectly
- Missing or outdated plan documents
- Incorrectly setting up newly eligible employees
Employee benefit plans are complex. Learn more about how the team at Corrigan Krause can help you choose the right plan and properly comply with reporting and fiduciary obligations by clicking here.