As a small business owner, you want to set up employee benefits that will attract the top talent to join your firm and that will encourage those individuals to continue to work with your firm. A great employee benefits package may include paid time off and healthcare coverage, and it also will include a retirement plan.
The retirement program options available for small businesses are unique from those available for larger businesses, and you may not know how to go about setting up this type of plan for your employees. By following a few easy steps, you can make a wise decision about the type of plan to implement and can more easily incorporate that plan into your regular benefits program.
Do Your Research
As a first step in incorporating a retirement plan into your benefits program, you should carefully research the plan options so that you make the right decision for your needs. The main plan options available for small businesses include a SIMPLE IRA, an SEP IRA, a Solo 401(k) and others.
These plans each have their own pros and cons associated with tax benefits, accounting and record-keeping requirements and more. You can use the Internet to gain a basic understanding of them, but feel free to contact a program administrator or facilitator for personalized answers to any questions that you have.
This is an important decision that can impact the current financial situation and future well-being of yourself and your employees, so you should take time to educate yourself about the plan options and to make a more informed decision.
Consider The Needs Of Your Employees
As a secondary consideration, it is important to think about the needs of your employees. You want to create a benefits package that they find advantageous, and everything from contribution limits to the ability to provide an attractive employer-matching benefit should be considered when you are researching the options and making a decision about which retirement plan to use.
Work With The Plan Facilitator
After you have made a final decision about which retirement plan to move forward with, your next step is to work with the plan facilitator or administrator to set up the plan. This requires a considerable amount of paperwork, but the right facilitator will assist you with completing it accurately. You will need to complete forms for each of the employees who will participate in the plan in most cases.
Update Your Payroll Process
In addition, you will need to update your accounting process so that your payroll takes into account the contributions of your employees as well as your own employer contributions. This will include adjustments to tax with holdings as well as new columns in payroll stubs that show the current with holdings, employer contributions, employee contributions and totals for the pay period and for the year.
Implement the Plan
The final step to take is to implement the retirement program. This should begin on a specified date that your employees are aware of so that they can expect the lower take-home pay after the contributions are made. Your facilitator may assist you with this process so that it is streamlined and executed in the most effective way possible.
Setting up a retirement program sounds complicated, and it does require a considerable amount of research and education about the options available. However, after you have decided on an option that is suitable for your needs and for the needs of your employees, you can implement your program with the assistance of your facilitator and bookkeeping team. This can help you to provide an attractive benefits plan to your employees that promote the attraction and retention of top talent in your company.