Small Business 401(k) Plans / Profit Sharing
Are you looking for a 401(k) plan for your small business? Offering retirement plans is essential to recruiting and retaining quality employees, but it’s a benefit with a lot of complexity and risk.
What Is A Profit Sharing 401(k) Plan?
A profit-sharing 401(k) plan gives business owners flexibility in how much they contribute to their employees’ 401(k) accounts. With this option, instead of a standard employee-match program where the employer will match the employee's contribution up to a certain amount, the employer has more flexibility and control over the contribution.
This still works just like any other 401(k) plan. Every employee enrolled in the plan will have an account and the business can add the desired pre-tax profits to the 401(k) profit sharing account.
The Benefits Of Offering A 401(k) Or Profit Sharing Retirement Plan
When you’re a business owner, a 401(k) or profit-sharing retirement plan is a must to help attract and retain great employees. By implementing a profit-sharing plan, you can show employees that they are a critical component of your company’s success by rewarding them for their hard work. While it may seem like a benefit that only serves the employees, small business owners can reap several benefits as well, including:
- Flexibility: As a business owner, you can determine a plan that works best for you and your organization. You can determine how contributions will be made, set eligibility requirements and vesting schedules, and decide how much to contribute or whether to make a contribution at all.
- Tax Benefits: Employer contributions to a 401(k) and profit-sharing plan are tax-deductible for your company for the year in which they are made.
- Attracting and Retaining Quality Employees: According to a survey by Willis Tower Watson, 75% of new hires at a company offering 401(k) say that a retirement plan provides a compelling reason to stay.
How PEOs Help With Profit Sharing And 401(k)s For Small Businesses
1. Cut Costs and Reduce Stress
In serving as the plan co-sponsor, PEOs can leverage group buying power to reduce plan costs for small businesses and take on the fiduciary burden to ensure you remain compliant with your 401(k). Plus, your employees benefit because smaller fees mean they can contribute more to their retirement savings.
2. Save Time
Stop wasting time trying to make sense of your legal responsibilities. When you work with GMS, we’ll take care of the administrative tasks, including auditing and plan management. Plus, we centralize plan administration, so you won’t waste time tracking down multiple vendors. If you have a question, concern, or update, just give your account representative a call.
3. Offer Benefits Your Employees Want the Most
GMS can help you set up fully customizable retirement savings plans that make your company more attractive to quality employees.
With GMS, you can easily establish:
- 401(k) eligibility requirements
- Vesting schedules
- Tax-deductible matching
- Profit-sharing contributions