One of the primary benefits that companies have uses over the years for employees is a 401k plan. The best companies even matched the contributions. After the recession hit, the number of companies offering this benefit dropped.
Lack of Money and Interest
Many small businesses do not offer any retirement plans for their employees. One of the reasons why this is the case is because of uncertainty about revenue. When they are concerned about sales and profit, they look for areas that are not essential to cut. Retirement benefits often fall into this category.
Companies that have numerous part-time or seasonal workers or high turnover may not feel the need to offer retirement benefits. One of the big issues is that employees don’t value this benefit so employers don’t offer it. They are likely to have younger workers who are not thinking forward to retirement yet.
Why would a company offer a benefit that is not seen as valuable to its employees? According to one survey, only 14% of businesses that employ less than 100 workers offer retirement plans to employees. Many of them cannot afford to offer the benefit and others do not understand which plans are best, especially if they have both young and older workers.
Choosing the Right Retirement Plan
If you are interested in offering a 401k plan as a benefit to your workers, you may be one of those who are concerned about the complexities of enrolling and choosing the best option. You should ask some tough questions to know you are enrolling with the right broker.
While looking for a company that offers low fees is important, other aspects of the plan bear consideration, too.
- Who handles the paperwork?
- Who explains the plan to the employees?
- Does the company help you design the right plan for your employees?
- How do you get the money when an employee retires? Can an employee get a loan on the plan?
As the following articles show, a good company will be able to answer your questions and explain everything in language you understand about the different “Retirement plan solutions” that are available.
Get Employees to Contribute
If you offer a retirement plan, you want your employees to take advantage of the benefit. To encourage participation, set up meetings that educate staff on retirement and plans. Sometimes people don’t contribute because they don’t understand the plan. When you educate them, you take away the fear of the unknown.
Offer automatic enrollment. When employees are automatically enrolled in a plan, they are more likely to use it. Make sure you let them know this is occurring and allow them to opt out.
Having a 401k plan is a wonderful benefit to employees. That said employers must make certain their staff understands that benefit.
For businesses that don’t offer such a plan, they should think about getting one to help employees invest in their own futures.
About the Author: Joyce Morse is an author who writes on a variety of topics, including business and finances.