By starting a new retirement plan, you have the unique opportunity to start from strength, without legacy headaches and challenges. We have learned a lot since the first 401(k) was introduced nearly 50 years ago. Here are some best practices for engaged employers:
Choose a safe harbor plan design for fewer compliance headaches. By meeting the requirements of a safe harbor plan, you ensure that annual non-discrimination testing will automatically pass when certain conditions are met. You can feel confident that this will likely mean fewer compliance concerns down the road.
Hire the right team to work for you. The Department of Labor encourages plan sponsors to hire prudent experts. By including a 3(16) administrative fiduciary and 3(38) investment management advisor on your retirement plan team, you can focus your time and efforts on what you do best, grow your business, and leave the heavy lifting to the professionals. This may sound like an expensive proposition, but, we can leverage our organization’s size and scale to demand more competitive pricing from industry providers and investment managers.
Make savings easy and encourage employees to start early. Automatically enrolling employees and increasing their savings a bit each year, puts them on the right side of inertia. Couple that with offering Roth contributions for tax flexibility and loans/hardship distributions in the case of an emergency and your organization’s retirement plan can become the center of a plan for financial independence.
Promote the financial health of your employees. Planning for retirement is an important financial goal, but likely not the only financial concern faced by your employees. Research shows that 2/3 of employees report to be distracted at some point during the week due to their financial challenges.1 Offer holistic financial education and targeted messaging to support your employees’ unique circumstances. The good news is that you don’t have to do it alone. Raymond James, working with your plan’s provider, can help.
SAVE Yourself Time, While Your Employees SAVE For Their Financial Future
1 Source: PricewaterhouseCooper’s 2021 Financial Wellness Survey
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.
