Advantages of 401(k) for Employers
Many employers know that offering their employees a 401(k) plan is an important part of creating and keeping a strong company culture. However, due to initial costs or lack of knowledge regarding 401(k), some hesitant company owners do not include a retirement plan into their benefits package.
For those employers who do provide their staff with the choice to enroll in a 401(k) plan, not only are they helping their employees save for retirement, but they can also take advantage of numerous benefits including tax deductions and lowering costly employee turnover rates.
Tax deductible employer match – any percentage or dollar amount that an employer contributes to their employees’ plans are tax-deductible, resulting in a tax write-off for both parties. This means, the bigger the match the employer gives, the higher tax reduction they receive.
Tax credit – companies may be able to claim a tax credit for necessary startup costs such as setting up and administering the plan and educating employees about the plan. Employers can receive 50% of eligible startup costs with a maximum of $500 per year for each of the first three years of the plan.
Flexible plan options – 401(k) plans can be made to meet the need of specific companies. So, whether an organization wants to maximize its tax savings or offer a competitive benefits package, there are many possibilities available.
Lower costly employee turnover rates – employee turnover is extremely expensive, which is why it is critical companies take steps to retain quality talent. Offering employees benefits such as a retirement plan allows employers to attract excellent workers while saving costs related to the constant recruiting, interviewing, and training of new hires.
Still unsure whether you would like to offer your employees a 401(k) plan? Professional Employers Resources, Inc. (PER) has the experience needed to help you understand the costs and benefits associated with setting up a retirement plan at your company.
By adopting a multiple employer plan, you will receive all the benefits of an individual plan without the extra costs that come from document fees, audit fees, and legal fees. Learn more about our cost-effective retirement savings plan solutions by calling 888-599-4991.