Broker Check

Employee Benefits: Retirement Plans and More

| September 21, 2017
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As an employer, you know that retirement benefits are an integral part of your employees’ overall compensation package. Offering a retirement plan can be beneficial for both you and your employees. It can demonstrate to valued employees, or prospective employees, that your concern for their welfare extends beyond the office walls and their years of service. There are a number of different retirement options available, including the following: 

Defined contribution plans, such as a 401(k), let employees contribute a percentage of pretax salary, with restrictions, into a retirement account that allows earnings to grow tax deferred. Employers have the option of matching contributions, up to a predetermined percentage and subject to a maximum. 

A Simplified Employee Pension (SEP) is a common retirement plan option for employers with 100 or fewer employees. With SEPs, employers use Individual Retirement Accounts (IRAs) as a way of providing employees with a pension benefit. 

Savings Incentive Match Plans for Employees (SIMPLEs) are also designed for employers with 100 or fewer employees. This type of plan uses either IRAs or 401(k)s to provide a retirement benefit for employees.  

Defined benefit plans, or pension plans, provide an employee with a retirement benefit, generally based on the employee’s length of service, salary, and a benefit formula that typically calculates the average of the employee’s earnings over a prescribed period of time. 

In deciding which type of retirement plan to offer, you may want to consider the following: the ages and compensation histories of employees, level of employer contributions anticipated, your company’s profit history, plan administration costs, and the expected length of time the plan will exist. A wide variety of plans are available to you, and so it makes sense to choose a benefit package that best suits your business. 

More than Retirement

Employers may want to offer their employees numerous additional benefits that can serve to improve the employees’ quality of life. These include, but are not limited to, flexible spending accounts (FSAs), dependent care accounts, medical expense reimbursement accounts, vacation and sick-time benefits, maternity benefits, adoption benefits, employee assistance programs, fitness club memberships, credit unions, and the use of company vehicles. 

Services and programs that help employees may result in improved satisfaction levels, greater employee retention, and increased productivity.

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