Retirement Planning Options for Your Small Business

To attract new talent and retain well-qualified employees, companies must remain competitive with the benefits they offer. Although healthcare coverage ranks at the top of the list of benefits employees most desire, retirement planning ranks up there as well. There are several types of business retirement programs are out there, but which is right for your small business?

Retirement Plan Types

A company has many types of retirement plans it can offer including, SIMPLE IRAs, SEPs and pension plans. However, most employer-sponsored retirement plans are defined contribution plans where employees contribute to the plan, and the company provides a matching contribution. There are four types of defined contribution plans to choose from:

  • Profit sharing
  • Safe harbor 401k
  • Automatic enrollment 401k
  • Traditional 401k

Plan Administration

Due to the complexity of plan administration, most employers contract with a firm that specializes in retirement plan services. It is crucial to comply with all rules and regulations to maintain your fiduciary compliance and avoid IRS fines and penalties. Annual plan administration tasks include compliance testing, IRS reporting, processing distributions, and maintaining plan documents.

Sponsoring a retirement plan can provide your company with many advantages, but it is important to work with qualified retirement service professionals to structure a plan that works best for your small business.