401(k)s For Your People?
Running a small operation is no longer a barrier to setting up employee
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.