401(k)s For Your People?

February 1998

401(k)s For Your People?

Running a small operation is no longer a barrier to setting up employee retirement funds

Companies with 25 to 200 employees can now more easily set up 401(k) plans. Formerly the province of large companies, these attractive retirement accounts allow employees to decide where to invest their money and enable small businesses such as retail jewelers to offer a benefit "like the big boys" - increasingly important in today's tough hiring arena.

The burdensome record-keeping requirements that discouraged small companies from starting a 401(k) are now being taken over by turnkey vendors that handle administrative duties, reports Inc. magazine. Such vendors, including banks and mutual funds, design the plans and send statements to your employees.

They provide you with a way to share profits with your top people in a meaningful way - in good years, you can offer to match whatever they contribute to their 401(k)s with a company contribution. This shows your staffers you care about their retirements and want to reward their hard work.

If you have only a few employees and don't want to get into a 401(k), you can usually get a mutual fund to set up a simplified employee pension plan that it will manage for you.

Copyright © 1998 by Bond Communications.


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