Offering a retirement benefit is now considered a mandatory Employee Benefit. Whether you have 1 employee or 1,000 Employees, in order to attract and recruit employees you must offer this mandatory benefit. Retirement benefits are typically broken into two plan types: Simple IRA and 401k
Retirement Benefits: Simple IRA
A Simple IRA is called a Simple, due to the low administration that is required to maintain and put a plan in place. A Simple IRA is different than a 401k as it only offers two types of Employer contributions. Employers may choose from contributing 2% of an employee’s compensation regardless of whether or not the employee contributes or 3% dollar for dollar based on the employee’s contribution. Employee contribution limits in a Simple IRA are less than that of a 401k. Contact us today to get started. Simple IRAs are a great easy retirement benefit to start off with.
“A Simple IRA is just that – simple. It is simple to administrate however there are not many options in Employer Matching.”
Retirement Benefits: 401k Plans
A 401k plan is another retirement benefit available to employees through their Company. 401ks offer a wide range of customization. Standard Employer match amounts are typically 3% dollar for dollar on employee contributions. The 401k allows Employers to contribute up to the IRS combined maximum amount allowed which can far exceed the 3% “typical match”. 401ks do require certain administrative requirements such as non discrimination testing, 5500 tax returns and more. A 403B is a similar plan but for non-profits. Contact us to get started.
“A 401k offers the most flexibility in Retirement Planning, however it comes with increased administration and cost.”
401k Administration and Payroll Services
Due to the requirement that 401ks have administrative requirements, many Employers choose a third party administrator (TPA) to take care of these items. The TPA will prepare your annual 500 tax return, offer non discrimination testing, as well as maintain employee census information. Once an Employer elects a TPA, Payroll Services prepares a file that is sent to the TPA every payroll to meet all of the Employer’s responsibilities. Payroll Services can also send the vendor payment to whichever fund management company the Employer selects. Contact us to get started. Whichever retirement benefits you choose, Payroll Services LLC can assist in administrating your reporting requirements.
“Take the administration out of 401k with Payroll Services Retirement Services.”