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  • Beginning July 1, 2022, the business standard mileage rate for transportation expenses paid or incurred will be 62.5 cents per mile. The IRS recognizes the gasoline price increases which has caused this midyear change. A new rate for deductible medical or moving expenses will be in effect starting July 1, 2022. The price will be changed to 22 cents per mile as opposed to 18 cents in the first half of 2022.

    The business standard mileage rate is used to calculate the deductible costs of operating a vehicle for business purposes. In addition, the federal government and many businesses use this rate as a benchmark for reimbursing their employees’ mileage.

    IRS Commissioner Chuck Rettig stated, “We are aware a number of unusual factors have come into play involving fuel costs, and we are taking this special step to help taxpayers, businesses, and others who use this rate.”

    Simplify Your Payroll Administration

    Business owners can utilize the IRS mileage rate through the support of GMS. Our team of payroll experts will be able to answer any questions you may have regarding the changing rates. Consider offering mileage reimbursement at the IRS rate so that your employees feel valued during these unprecedented times. Contact us today. 

  • Retirement planning is the process of setting income goals, followed by the actions and decisions necessary to achieve those goals. This includes classifying sources of income, sizing up expenses, implementing a savings program, and managing assets and risk. Retirement planning is the financial strategy you take in saving, investing, and ultimately distributing money meant to sustain oneself during retirement. Planning prepares individuals for life after their income ends.

    Depending on where you are in your life, whether you’re a recent college graduate or five years into your career, your retirement plan will constantly change. If you’ve just entered the workforce, your main goal will be to save a certain percentage of your income. Once you reach the median portion of your career, you may want to consider increasing your specific income or target goals and take steps to achieve them.

    As a small business owner, you may have never thought about offering retirement plans to your employees. If nothing else, consider it as a recruiting tool – employees are concerned about their future and are looking for employers to provide peace of mind. The purpose of offering retirement benefits is to increase the economic security of your employees. Offering one has numerous benefits:

    • Attract and retain quality employees
    • Lower income taxes
    • Supersize retirement returns
    • Payroll deductions
    • Long-term compounding
    • Creditor protection
    • Pre-tax contributions
    • Employer contributions 
    • Roth contributions

    If you are wondering if you should begin offering this type of benefit to your employees, you first want to explore the different options available. Continue reading to see which option(s) might be the best fit for your business.

    Retirement Plan Options

    Traditional IRA

    A traditional IRA is available to anyone offering a wide range of plans and investment options. IRA stands for individual retirement account – meaning, they are tax-favored savings plans that are, for the most part, opened and managed by individuals themselves. Any individual who has taxable income can contribute to a traditional IRA.

    When making contributions to a traditional IRA, it reduces your taxable income while the money grows tax-free until you withdraw it. It is very similar to a 401(k) plan; however, the contribution limits are much lower in a traditional IRA. As of 2022, the contribution limits are $6,000 if you are under the age of 50 or $7,000 if you’re 50 or older. Individuals do not pay income taxes on their contributions, but instead, you pay taxes when you withdraw the money from your account at a specified time.  

    Roth IRA

    The main differentiator between a traditional IRA and a Roth IRA is when you receive the tax benefits. For a Roth IRA, you pay taxes on the money you contribute. This means that when you withdraw your money, you withdraw it tax-free at the time of retirement.

    To decide which plan to go with, the traditional or Roth IRA, experts have said to determine whether you expect to be taxed at a higher or lower rate when you retire. Many individuals create their retirement plans assuming that they’ll fall into a lower tax bracket once they retire. If you feel that you won’t be in a lower tax bracket when you retire, you could pay less income tax with a Roth IRA.

    When contributing to a Roth IRA, you are allowed to withdraw money after the age of 59 ½. However, there are several exceptions to the early withdrawal penalty. Should you purchase your first home, have an extensive amount of college expenses, or have a child, you might be able to withdraw from your Roth IRA with no penalty. With that being said, you are only able to contribute to a Roth IRA if your annual income is below a specific threshold.

    SEP IRA

    A SEP IRA stands for a simplified employee pension. This type of retirement plan is used mainly by self-employed individuals or small business owners. If you’re a business owner, this plan may be cheaper and easier to operate as opposed to a 401(k) plan.

    With a SEP IRA, you have the capability to put away a greater amount of savings each year. An employer can contribute up to 25% of each employee’s income, up to a maximum amount of $61,000, as of 2022. If you’re self-employed, you’re able to contribute up to 25% of your net income up to $61,000. With a SEP IRA, individuals are 100% vested in employer contributions. However, the immediate vesting of employee benefits may be a disadvantage for employers since the employee will take the money with them when they leave.

    Simple IRA

    A simple IRA is a retirement plan option for small businesses with 100 employees or less. Simple stands for savings incentive match plan for employees – meaning, employers must do one of two things:

    1. Match employee contributions up to 3% of the employee’s salary
    2. Contribute 2% of an employee’s salary regardless of any contribution from the employee

    Simple IRA plans offer a substantial source of income at the time of retirement by allowing employers and their employees to set aside money within retirement accounts. The main differentiator between conventional retirement plans is that with a simple IRA, there are no start-up and operating costs.

    With this type of retirement plan, employees are always fully vested which means no matter when the employee leaves the company, they can keep all the employer’s contributions. In 2022, employees can contribute a maximum amount of $14,000 of their annual salary or if they’re over the age of 50, they can contribute up to $17,000.

    401(k)

    The most popular option for a retirement plan is a 401(k). According to the Internal Revenue Service (IRS), a 401(k) is a feature of a qualified profit-sharing plan that allows employees to contribute a portion of their wages to individual accounts. The plan can be a profit-sharing, stock bonus, pre-ERISA money purchase pension, or a rural cooperative plan.

    An employee who signs up for a 401(k) agrees to have a portion of each paycheck paid directly into an investment account. Some employers may decide to match part or even all the employee’s contributions. There are two basic types of 401(k) plans – Traditional and Roth.

    The money in your 401(k) grows tax-free until you withdraw it. Once you choose to withdraw it, you’ll pay income tax on the money you take out. However, you must be 59 ½ or older to withdraw your money from the 401(k) plan without a penalty. You are also required to start withdrawing money from your plan at the age of 72.

    Most employers tend to offer 401(k) plans because they have fairly high contribution limits. In 2022, you can contribute up to $20,500 or $27,000 if you’re over the age of 50.

    Tom Smith, Director of Retirement Services at GMS, stated, “For employees, a 401(k) holds numerous benefits. Contributions are deducted directly out of their paycheck versus the employee having to send money to an account themselves. If their employer matches contributions, then it becomes a no-brainer for the employee to participate because they leave free money on the table if they do not.”

    Solo 401(k)

    A Solo 401(k) assists in maximizing retirement savings for individuals who are self-employed and business owners that don’t have employees. These plans are also known as individual or one-participant 401(k) plans. A Solo 401(k) is very similar to a standard 401(k) plan, except for the ability to boost your savings by contributing as both the employer and employee. 

    Individuals can contribute up to 100% of self-employment income with a maximum amount of $20,500 or $27,000 if you’re over the age of 50. In addition, you can act as the employer since you’re self-insured and contribute up to 25% of your business’ income. This may be the best option for those who are self-insured as you may be able to contribute more with this dual contribution formula.

    Partner With GMS Today

    No matter which retirement plan you choose, they all provide tax advantages as incentives to save for retirement. Now, you may still have a handful of questions and are still hesitant if you should offer a retirement plan to your employees. GMS is here to help. A PEO like GMS can leverage group buying power to reduce plan costs for small businesses and take on the fiduciary burden to ensure you remain compliant. As a business owner, you can stop wasting time trying to make sense of your legal responsibilities when you partner with GMS. With GMS, you easily establish: 

    • 401(k) eligibility requirements 
    • Vesting schedules
    • Tax-deductible matching
    • Profit-sharing contributions

    For more information about offering retirement plans to your employees, contact our experts today.

  • Prior to the pandemic in 2020, research showed that one in five adults struggled with mental health issues. Post pandemic has triggered a 25% increase in anxiety and depression, according to the World Health Organization (WHO). With this drastic increase in the past couple of years, employers need a plan of action to increase the health and wellbeing of their employees.

    With employees returning to the workplace, it can be stressful and overwhelming. Individuals are still adjusting to the “new normal” and need support and resources. With all the changes in the work environment, many individuals have started prioritizing mental health within the workplace.

    A survey conducted by the Employee Benefit Research Institute (EBRI) showed that in response to the pandemic, 50% of employees believe mental health wellness programs are more important than ever. Unfortunately, cost continues to be a concern for many individuals. The survey also found that three in four people trust their employer to offer quality benefits and offerings that will improve their overall well-being.

    The following will help to create a safe work environment and ensure the welfare of all employees:

    Promote Health And Well-being

    Employee wellbeing refers to the state of employees’ physical and mental health and focuses mainly on factors including mood and perception. The leadership of your organization needs to create a healthy culture and supportive environment for their employees. Educating leaders on how to recognize the signs of stress and mental health issues will help reduce turnover and absenteeism. Poor mental and physical health ultimately leads to lower moods, poor concentration, difficulty making decisions, and inadequate performance. Ideas that you can utilize to promote employee well-being in the workplace include the following:

    • Ensure recognition is a part of your company culture
    • Practice mindfulness
    • Create impactful mentoring programs
    • Promote mental health awareness

    Workspace/Work Flexibility 

    Your work environment can affect your mental wellness. On average, individuals spend 90,000 hours at work which is nearly one-third of our lives. How work affects us is directly related to our physical environment. Since the beginning of the pandemic, hybrid work became a new concept where employees worked from home two to three days per week and physically entered the office the remaining one to two days. Allowing flexibility like this in your business allows your employees to have a wider range of freedom. If the employees have children, they have adequate time to drop them off at school or take care of loved ones. A study found that 72% of employees report that work-life balance is especially important when considering a new position.

    When individuals think of office work, they probably think of people sitting at a desk all day. Sitting at a desk for an extensive period of time takes a toll on your body and mind. It goes hand in hand with the risk of anxiety and depression. Research is still being conducted to determine the reasoning behind it, but it’s most likely related to lack of exercise. Once an hour, individuals should get up from their desks to take a break physically and move around, stretch, get some water, clear your head, etc.  

    Communicate

    Communication is a valuable tool in managing many aspects of mental health and the well-being of your employees. As there are a handful of ways to communicate with team members, it’s important to determine the most effective way your team communicates. Understanding your team member’s communication styles is important to succeed. If they prefer face-to-face conversations over email or video, meet with them in person. Effective communication between your leaders and your employees strengthens relationships and ensures everyone is on the same page. This will create a positive working environment and improves motivation and productivity. Remember to always check in with your colleagues. Encourage a happy and motivating workplace. 

    What Is Your Company Doing To Address The Well-being Of Your Employees?

    Your employees’ career is a vital part of their life. Increased mental well-being is connected to happier work, more effective collaboration, and increased productivity. When partnering with GMS, we offer a wide range of benefits to your employees. Through our employee assistance program (EAP), our clients have access to free confidential services including legal and financial consultation, childcare, special needs, counseling, and more. If you choose to utilize free counseling, you have up to four sessions, per problem for face-to-face counseling with 24/7 access. To learn more about our benefits offerings, click here. 

  • Do you enjoy the benefits of partnering with a PEO, but you aren’t sure you’re getting everything you were promised in the beginning? If you currently partner with a PEO, you know there are a wide array of benefits you gain through the partnership. When you partner with GMS, you will receive access to our experts in the fields of payroll, employee benefits, human resources, and risk management.

    Making the switch to a different PEO may seem mundane, but it’s important to ensure the partnership with a new PEO is the right fit. Continue reading to learn how simple it can be to switch from one PEO to another.

    Step 1 – Define Your Reasons For Switching PEOs

    The most important step in switching from one PEO to another is determining the reason why you want to switch. Make a list of pros and cons of your current PEO. The types of services and support you want not only have a direct effect on which PEO is right for you but also impact the transition process. 

    Consider asking yourself the following questions to fully understand your reason(s) for switching.

    • Are you receiving everything you were promised at the beginning of your partnership?
    • What services is your current PEO offering you? 
    • What services do you feel are lacking (if applicable)?
    • How fast do they respond to your correspondence and through what channels are they accessible – email only, phone, fax, and so forth. 
    • What red flags, if any, have you experienced that need to be addressed?
    • How often does your HR account manager facilitate onsite visits?
    • Do your employees have easy access to their payroll information?
    • How flexible is your medical plan for your employees?
    • Are your claims being handled properly and in a timely manner?
    • How often do you review your workers’ compensation rate?

    Step 2 – Find The Right Fit

    If you’re considering switching PEOs, you may ask yourself how beneficial it will be for your business to continue a partnership with a PEO. When determining the right PEO for your business, consider your ever-changing business needs. What are your current challenges? Do you anticipate any changes to your business that could impact which services you need? 

    Not all PEOs are created equal. Some are brand new to the PEO market, while others have been around for quite some time. With that said, every PEO offers different services, and some may be a better fit than others. Do your research and ask questions to grasp a better understanding of each business.

    Step 3 – Cost And Value

    PEOs are dedicated to helping businesses grow, so we understand the commitment involved in a partnership. However, having already worked with a PEO, you understand the value a PEO can offer your business. Most PEOs have an enrollment fee that can run up to a couple of thousand dollars for your company. Consider looking for a PEO that is transparent about pricing. You will most likely have a first meeting with each PEO you are interested in. If they aren’t upfront and honest and can’t give an explanation behind the pricing, that’s a red flag right away. Your costs of doing business may be increased unintentionally due to ineffective HR processes. Decreased productivity, high employee turnover, less impressive employee benefits, and more, are ways your ineffective HR practice could be hurting your bottom line. 

    Step 4 – Partnership Overview

    Since you’ve gathered information about top PEOs you are interested in partnering with, it should be clear which organization you want to work with. It’s important to consider the conversation that will be had with your current PEO about parting ways and switching to another PEO. Your previous PEO may require a written notice of termination – a 30-day notice is typical. Create a plan with your team members to ensure a smooth process for the transition of services.

    Your new PEO will provide you with a documented plan of what the partnership will look like. They will show you how the transition and onboarding process will look and how they will get your employees settled in with the new PEO.

    Step 5 – Onboarding

    While PEOs save companies time in the long run, the process of onboarding with a PEO can be time-consuming in the beginning. You must get through the growing pains first before taking advantage of the amazing benefits. There will be multiple steps in the onboarding process consisting of a pre-launch meeting, HR and benefit meetings, and a conversation about payroll. Depending on the PEO you decide on, you should have the option to sign physical documents or submit them electronically if the company is paperless. Once the documents are completed and filed, the implementation process will begin. At the end of the onboarding process, you will have a faster, smarter, and more efficient HR administration process. 

    Find The Right PEO To Help Your Business

    Finding the right PEO to assist with your administrative functions is vital to the success of your business. Managing the many HR functions is the backbone of your business. Researching a variety of different PEOs and choosing the right one can be time-consuming, but in the long run, will provide you with more free time so you can focus on growing your business. A PEO provides you with the administrative support you deserve.

    At GMS, our team of experts works diligently with you and your employees to make your business simpler, safer, and stronger. To learn more about how GMS can benefit your business, contact us today.  

  • The U.S. House passed a bill on a bipartisan 232-193 vote that would limit the price of insulin for Americans with health insurance. Democratic Senators Warnock of Georgia and Patty Murray of Washington state held a round table virtually consisting of residents from both states to push for capping the cost of insulin at $35. Both parties argued that insulin is a life-saving drug, and there should be no reason for the cost of this medicine to rise the way it is. The senators were joined by citizens who have experienced diabetes firsthand.

    Initially, this provision was incorporated in the President’s “Build Back Better” social spending and climate package sent to Congress that was delayed in Senate. Having insulin rationed because it’s too expensive poses a direct threat to people’s health. That’s why there is an effort to cap insulin costs.

    The Kaiser Family Foundation (KFF) is a nonprofit organization that focuses on national health issues. The organization conducted research and found that Medicare spending on insulin increased 840%, from $1.4 billion to $13.3 billion. Kevin Wren, a Type I diabetes patient from Washington state, announced that the cost of his insulin was sometimes more than his rent. This bill will lower costs for nearly 40 million Americans and save lives.

    A press conference was held by Craig and Democratic Reps. Lucy McBath of Georgia and Dan Kildee of Michigan, and Majority Whip Jim Clyburn of South Carolina, to advocate for the measure passed by the House, the “Affordable Insulin Act.” This bill would ensure that no patient will pay more than $35 for a 30-day supply of insulin. A total of 12 Republicans voted with the Democrats for the bill.

    Members who attended this conference hope that Congress will send the legislation to President Joe Biden for his signature. His signature will lower drug costs for millions of American families. One in four Americans who need insulin has stated they needed to cut back or have skipped doses because the price is too high.

    GMS Helps You Live A Healthier Lifestyle

    When partnering with GMS, you can utilize our buying power through economies of scale to access more affordable and comprehensive healthcare options. GMS’ savings, on average, are 23% lower for employee premiums and 34% lower for family premiums. We recently launched our diabetic management program with One Drop, which helps employers and their employees transform their health, change lives, and create new opportunities. Learn more about how GMS can provide you with the resources to save you and your employees time and money. 

  • The Illinois Secure Choice Savings Program (Secure Choice) allows workers to save money for retirement on their own. This is required for any business in the state of Illinois that has at least five employees, has been in business for two or more years, and does not currently offer a retirement plan. Businesses who fall into this category must begin offering a qualified plan to their employees, or automatically enroll their employees into Secure Choice.

    Program Overview 

    Participants of the Secure Choice Program are enrolled in a default target-date Roth IRA with a default five percent payroll contribution. However, participants can change their contribution level or fund option at any time or choose to opt-out of the program. Employers register their employees for this program so that accounts can be created, and payroll contributions can be made.

    The Illinois Secure Choice Program differs from a traditional retirement plan. When enrolled in the Secure Choice Program, employers are not considered plan fiduciaries, they do not pay fees, they do not make contributions into their accounts, and they’re not responsible for plan paperwork or administration. Instead, the Secure Choice is run by a seven-person Board with Treasurer Michael Frerichs serving as Chair. Frerichs office administers Secure Choice on behalf of the Board, and then partners with private-sector financial service firms for a variety of services.

    The Secure Choice Savings Program launched in 2018 with a phased implementation that’s based on employer size. The next phase in this program begins in November of 2022 for businesses that consist of 16-24 employees.

    Employer Registration Deadlines

    Depending on the size of the employer, program deadlines vary. The deadline for businesses with 16-24 employees is November 1st, 2022, and the deadline for 5-15 employees is November 1st, 2023. Any employer who does not meet their required deadline may be subject to enforcement which could consist of financial penalties. The Illinois Secure Choice Program has over 97,200 participants as of December 1st, 2021. Altogether, these participants have saved nearly $80 million for retirement.

    Partner With A PEO Today!

    Employers face a constant challenge today in retaining good talent. It’s more important than ever for employers to offer their employees a retirement plan, in order to attract good talent. The constant change in legislation adds strenuous time and energy to your business. When you partner with GMS, our experts help you navigate through these changes and assist in the process of enrolling your new employees. Do what you do best and outsource the rest!

  • In March of 2019, Governor Phil Murphy signed the New Jersey Secure Choice Savings Program Act to close the retirement savings gap. This Act created the Secure Choice Savings Program which was designed to provide a private path for employees to save for retirement. This means that certain employers are required to establish a payroll deposit retirement savings plan that permits eligible employees to take part in the program.

    Although the implementation of the program remains in the works, the new website is now operational as of April 2022. More information is expected soon which will include the next steps concerning how to implement this program in your business. To keep up to date on this Act, visit their website today.

    Employers Subject To The Act:

    The Secure Choice Savings Program applies to any person and entities that are engaged in a business, industry, profession, trade, or other enterprise within the state of New Jersey that:

    • Have not employed fewer than 25 employees in the state the previous calendar year
    • Have been in business for at least two years
    • Have not offered a qualified retirement plan in the past

    Qualified Retirement Plans:

    There is a common misconception that plans must be offered as a 401(k). However, there are a variety of qualified retirement plans offered to an employer, to avoid complying with the Act. These include Sections: 401(a) and (k), 403(a) and (b), 408(k) and (p), 457(b), or a plan sponsored by a PEO.

    How Employers Will Comply:

    To comply, covered employers must follow the steps below: 

    • Establish a payroll deposit retirement savings arrangement no more than nine months after the Board opens this program for enrollment. Each employee that will enroll in the program will be able to choose their individual contribution level.
    • Each employee who has not opted out will be automatically enrolled in the program.
    • Deposit deductions from employees’ payroll into the program.

    As this new Act rules out, employers are permitted to contract with a third party. A third party means partnering with a Professional Employer Organization like GMS, who will perform the tasks listed above on behalf of the employer.

    What This Act Means for Employees:

    Employees that were hired more than six months after the Board opens the program for enrollment and have not opted out, will be automatically enrolled. New employees who are eligible to enroll, will be automatically enrolled. New employees will be eligible to enroll annually. Employers are required to have an annual open enrollment period where eligible employees are able to change their elections under the Program. That also means that any employee who opted out in the previous year will be able to opt in during the new enrollment period.

    Penalties for Employers:

    Any employer who fails to enroll any employee without a reasonable cause in a timely manner is subject to the penalties listed below:

    • A written warning for the first calendar year in which a violation occurs.
    • For the second calendar year, there will be a $100 fine when a violation occurs.
    • For the third and fourth calendar year, there is a $250 fine for each employee who was not enrolled in nor opted out of participation in the program.
    • For the fifth calendar year and the years to follow, there will be a fine of $500 for each employee who wasn’t enrolled in nor opted out of participation in the program.
    • There will be a first offense penalty of $2,500, and a $5,000 fine for the second offense and each offense following when the employer collects employee contributions but fails to remit any portion of the contributions to the fund.

    Be Proactive And Partner With A PEO Today!

    As the board is still working on the implementation of this program, employers have time to figure out a game plan for their business. When partnering with a PEO like GMS, our experts will keep you up to date on these changes and assist in the process of enrolling your employees into this program. Offering a retirement plan is more important than ever to retain quality employees. However, at GMS, we know how challenging it can be to decide which plan is best for you and your employees. Are you looking for proactive ways to ensure your business’ success? Contact us today to learn more! 

  • If you’ve noticed that your family health insurance prices are on the rise, you’re not alone. In fact, the cost of family premiums for employer-sponsored coverage has jumped 47% in the last decade – which outpaces wage growth at 31% and inflation by 23% over the same period. In the last year alone, premiums for family coverage reached an average of $22,221, a 4% increase.

    Roughly 155 million people rely on employer-sponsored coverage, with 59% of employers offering health benefits. It’s no secret that the larger the company, the more likely they are to offer a health plan. That said, the looming crisis of affordability continues to be an ongoing issue throughout the country. This proves especially true for small businesses with tighter budgets and fewer management resources at their disposal. On average, small businesses pay 8-18% more than large firms for the same insurance plans. Furthermore, location and industry type can make your organization’s premiums even (you guessed it) higher. Northeast and Midwest regions of the United States typically see more expensive premiums – as do those in the transportation, utility, and construction industries.

    Outside of the cost to implement a group health plan, many small business owners are often spread too thin – thus making the cost of time to actually administer the plan yet another hurdle to overcome. Managing a group health plan can be labor-intensive because of the ongoing regulatory changes, complicated communication processes, and the dreadful renewal process.

    Still, not offering health benefits is a recruiting and retention risk that you do not want to take. “Offering a healthcare plan is one of the most effective steps you can take as we continue to witness a workforce shortage,” shared GMS VP of Benefits, Beth Kohmann. “In today’s turbulent times, people throughout the country are looking for a solid, affordable healthcare plan to give them peace of mind. As an employer, providing that to your employees is one of the most vital things you can do.”

    Given the difficulty of offering an affordable, comprehensive plan, it’s easy to see why many business owners turn to a Professional Employer Organization like GMS. When you partner with GMS, you’ll take advantage of our consultative approach, giving you plan options and savings that will benefit your organization. In fact, last year GMS family premiums were 34% lower than the U.S. average.

    Contact us today to discuss a health plan tailored to your organization’s needs.

  • New For 2022: 401(k) Contribution Limit Rises   

    The IRS announced the 2022 cost-of-living adjustments (COLAs) for employer-sponsored retirement plans. Both employee and employer limits will increase due to the continued rise of inflation. Employees under the age of 50 will now be able to max out their contributions at $20,500. This is a $1,000 increase from the cap in the years 2020 and 2021. Employees aged 50 and older will continue to be able to contribute an extra $6,500 in catch-up contributions, which has been unchanged for the last two years. 

    In addition, the employer-plus-employee contribution limit will increase to $61,000 in 2022, up by $3,000 from 2021. This is particularly beneficial for employers that make an annual profit-sharing contribution. 

    When dealing with the annual limit as a contribution goal, not all employees will be able to fund the maximum amount. However, if employees consider raising their contribution rate by even 1% each year, they will see a dramatic impact at retirement. “If your employer offers a matching contribution, it’s important to try and contribute at least that percentage as a minimum,” said Tom Smith, Manager – Executive & Retirement Benefits for GMS. “Also, striving to increase your personal deferrals each year in order to eventually reach those annual contribution limits will help increase your odds for a comfortable retirement.” 

    Employees that do want to max out their contributions should check in with their employer about reaching the annual limit prior to year-end. If this occurs, employees may lose out on employer matching contributions tied to each paycheck. Certain plans allow for a year-end “true-up” contribution, so it’s best to know your company’s 401(k) plan provisions to ensure you are receiving the maximum employer match.  

    It can be challenging for both the employer and the employee to comply with these limits. Employers must ensure that their payroll systems do not accept contributions once the limit is reached. Employees also must remember that the annual limit applies to the total contributions between all 401(k) plans. Since the contribution limit is an aggregate total, employees who work at multiple jobs over the course of a year and contribute to multiple different 401(k) plans will need to self-police how much they are contributing to each plan, so that they do not contribute more than the IRS limit. 

    How GMS can help:   

    Partnering with a CPEO (Certified Professional Employer Organization) like GMS can allow you to offer 401(k) and profit-sharing plans for your employees. It’s no secret offering retirement plans is important to recruit and retain quality employees, but they do come with a lot of complexity and risk. GMS takes on the role of the fiduciary to ensure employers maintain compliance, which means that business owners do not have to waste time trying to make sense of their legal responsibilities. When you work with GMS, we will take care of the administrative tasks, auditing, and plan management.  

    Interested in cutting costs and reducing stress? Contact GMS today to get your customizable 401(k) or profit-sharing retirement plan started. 

  • Why Certified Professional Employer Organizations Are Critical To Franchises

    Franchising has proven to be an extraordinarily successful business model for hundreds of thousands across the country, as it delicately blends entrepreneurship with tailored guidance. For most successful franchisees, their strength lies in the structure of their business operations. So, it makes perfect sense that adding a Certified Professional Employer Organization (CPEO) further increases a franchise’s operational efficiencies – especially considering that effective employee management is ranked #2 in the three biggest challenges that franchises face.

    Franchise owners are exceptionally fond of the CPEO model because they maintain control of all organizational decision-making, while HR burdens and liabilities are shifted to the CPEO.

    CPEOs manage a plethora of duties within the employment process – from benefits to HR services, and even payroll and tax, thus providing an extra layer of safety by ensuring regulatory compliance. Having undergone rigorous background, financial, and reporting requirements set by the IRS, fewer than 7 percent of PEOs in the U.S. are currently certified.

    Partnering with a CPEO offers your franchise:

    Benefits: Benefits administration can be tolling, especially when you consider onboarding, claims, and most importantly… rates. Because the CPEO model aggregates the employees of its clients, they then having the buying power of large corporations. In turn, your franchise and its employees enjoy competitive rates and solid coverage.

    HR Services: Whether it’s employee handbooks, onboarding, drug testing services, or employment verification – amongst other things, your CPEO helps you simplify your HR plans. Now more than ever, as the country faces a workforce shortage, finetuning your employee experience is vital for your recruiting and retention.

    Payroll and Tax: CPEOs assume the responsibility for federal tax liability and penalties and are required to post an annual bond of up to $1 million guaranteeing payment of its federal employment tax liabilities. CPEOs ensure financial protections and tax benefits that non-certified PEOs do not necessarily have. This means paying your employees, record keeping + management reports, PTO accruals, and more, are no longer on your plate.

    Compliance: The co-employment relationship allows your franchise to substantially mitigate the risk associated with being an employer. A CPEO will provide guidance and support on new hire reporting, Employment Practices Liability Insurance (EPLI), unemployment and workers’ compensation insurance filings.

    A good CPEO can ease the mind of franchise owners while helping to reduce both their cost and liability. Contact us today to see how your franchise could benefit from with a CPEO.