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The Benefits of Offering Employees a Retirement Plan

  Arthur F. Rothberg, Managing Director, CFO Edge, LLC  
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  Article Summary  
Many executives at small businesses say they would like to offer retirement plans, but they have reservations based on complexity, costs and red tape they anticipate. But several changes in retirement plans now allow almost any business to offer an employee retirement plan.

For example, three pieces of legislation - the Small Business Job Protection Act of 1996, the Economic Growth and Tax Relief Reconciliation Act of 2001, and the Pension Protection Act of 2006 – provide enhanced features in 401(k) plans, higher annual contribution limits and catch-up options.

This article reviews four popular plan options - Simplified Employee Pension Plan (SEP), SIMPLE IRA, SIMPLE 401(k) and Roth 401(k). Discussed are areas like contributing parties, contribution limits, and catch-up provisions. The article also includes comments on a company’s fiduciary responsibility related to retirement plans.

The right retirement plan can make an employee benefits package more competitive, lower employee turnover and increase workplace morale. Business leaders at Los Angeles and Southern California companies may want to consider talking with a provider of outsourced CFO services. A formerly-seated chief financial officer with such a firm can help you review retirement plan options and select the one that is the best fit for your employees and your company.

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