Regulatory changes and the new entrants are presenting new risks for sponsors of retirement plans at small and mid-sized businesses. Today, the market is open with opportunities to reduce plan costs and pare the administrative burden long associated with offering a tax deferred savings plan.
Here we have listed a few broad ways to optimize your retirement plans for small business in today’s financial environment.
Over the past couple of years, the Fiduciary Rule proposed by the Department of Labor has garnered a lot of attention. This rule is framed specially to raise advice standards for investment advisers and ensure investment costs are transparent. This new regulations have put a pressure on companies to accurately perform their 401(k) administrative duties that ever before. So, here are a few things you have to implement for your business.
One of the best ways to improve the plan effectiveness is by lowering fees. Select providers with reasonable fees and have a clear understanding on how much each service is costing you and your employees.
One of the key responsibilities of 401(k) plan administrator is offering appropriate investment options. The investments must be actively monitored to ensure that your options remain appropriate.
A high employee participation rate means the plan is more likely to pass IRS non-discrimination testing without a hitch. The information on your participation rate, and how that rate compares with other plans of a similar size will be given to you by your 401(k) plan provider.
Making your plan more efficient can steer more compensation toward select employees in a tax efficient manner, allow the business to pay less in taxes, and boost the ability for employees to save for retirement.