The 401(k) plan has a bad reputation amongst small business employers, and we can’t blame them. Some options are too expensive to set up and some aren’t flexible to fit a small business’ needs. Many employers realize there’s a lot of administrative work involved to get one off the ground and to maintain—reasons enough to scare small business employers away.
In 2015, the Small Business Administrator reported small businesses as accounting for two out of three net new private-sector jobs, employing more than half of America’s workforce. These businesses are a major part of the nation’s economic engine. What do they need to continue thriving in a market plagued with highs and lows?
In this recurring DHR blog feature, Christine La fore (Associate General Counsel for DHR) brings clarity and definition to sometimes confusing terms that hold importance for employers and their HR policies. Christine has reviewed and analyzed countless legal documents and rulings and uses her expertise to help employers properly understand these items to apply policy and promote compliance.
- Is a retirement savings plan sponsored by an employer
- Is a tax-qualified, defined contribution pension account defined in subsection 401(k) of the Internal Revenue Code
- Allows workers to save and invest a piece of their paycheck before taxes are taken out
A 401k is one of the most valuable benefits a small business can offer its employees, yet less than 25% of these businesses offer it. But who can blame that 75%? There is so much information out there; it’s difficult to know what’s useful and which solution is the right one.
Join us for DHR’s complimentary webinar series on how to start a 401(k) plan at your small business. In this series, we will define a 401(k), discuss what it takes to operate and manage a 401(k), and offer the best solution for your small business.
A 401(k) plan is one of the most valuable benefits a small business can offer its employees. However, a 2013 Forbes article reported that of businesses with less than 50 employees, only about 24 percent offer a 401(k) plan. With so many retirement options available, why would nearly 80% of employers choose not to offer the benefit? There are a few concerns that often scare small business employers away from adopting a plan. This blog alleviates those concerns and helps employers reconsider offering it as an employee benefit.