Retirement Tips for Employers |
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The Service offers the following retirement tips for employers.
If you don't have a retirement plan:
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Consider the Benefits - for you and your employees. For example, your contributions are tax deductible, assets grow tax-free with compounding interest and you will attract and retain better employees. See Publication 4118.
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Choose the Right Plan - It is important to choose the right retirement plan for your business. There are a number of plans to choose from (IRA-Based to defined contribution to pension). See Publication 3998 for a chart outlining the advantages of each of the most popular types of retirement plans.
If you do have a retirement plan:
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Watch for Law Changes - Keep your plan up-to-date with the law. Ask your benefits professional "when and what" to change in your plan. Those who specialize in retirement programs may provide auditing and plan review services.
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Watch for Common Mistakes - Avoid the following mistakes:
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not following the terms of the plan document;
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not covering the proper employees;
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not giving the employees required information;
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not depositing employee deferrals or employer contributions timely; and
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not limiting employee deferrals and employer contributions to the proper limits.
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Perform Periodic Review of Your Plan - Errors in a plan brought on by changes in your work force and its salary deferral patterns are easier and cheaper to fix when they are small and have not been allowed to continue over a long period of time. Changes in your business may produce unexpected changes in your business operations. If you have a SIMPLE IRA, SEP or similar plan, consider a Check-up now. IRS Employee Plans has developed Publication 4405 which outlines available tools, tips/resources and help for a Check-up of your retirement plan. Tools include checklists for operating these plans - see Publications 4284, 4285 and 4286.
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Get an Independent Reviewer to Check Your Plan - An independent reviewer may see something that has been overlooked by others, which could save you and your employees money, and may improve benefits.
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Correct Mistakes Now - The Service has helpful correction programs that are structured to provide financial incentives for finding and correcting mistakes earlier rather than later. In fact, many mistakes can be corrected easily, without penalty and without notifying the Service. (See Publication 4224.)
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Monitor the People Who Work With Your Plan - Make sure that the correct data is getting to those who operate your plan. Monitor the plan investments. Make sure any fees are appropriate. Make sure the plan contributions and distributions are occurring properly and timely.
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Keep Informed on the Latest Retirement News - Subscribe to the Retirement News for Employers, a periodic newsletter from IRS Employee Plans.
Resources
IRS Publications:
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Publication 560
Retirement Plans for Small Business (SEP, SIMPLE, and Qualified Plans)
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Publication 4405
Have You Had Your Check-Up This Year? For SIMPLE IRAs, SEPs, and Similar Retirement Plans
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Publication 4406
403(b) and 457 Retirement Plans (with plan feature comparison chart)
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Department of Labor Publications:
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401(k) Plan Fee Disclosure Tool
A form that provides employers with a handy way to make cost-effective decisions and compare the investment fees and administrative costs of competing providers of plan services.
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Page Last Reviewed or Updated: October 14, 2008