Offering a retirement plan through your organization is a popular idea, as approximately 69% of employers offer retirement plans, and 52% of private employees use those plans. Because millions of Americans rely on retirement account savings during retirement, offering your team robust, accessible, and reliable plan options can make all the difference in engagement and long-term employee retention.
The first step to offering the retirement plan options your employees want is to learn more about the different types of plans. Then, you can explore how your organization can structure them to maximize their value and what resources you can use to implement your retirement plan program.
In this post, we'll discuss how companies can better understand retirement plans to best equip themselves to offer suitable and relevant plans and earn employee trust.
Implementing an employer-based retirement plan can help you meet several different organizational objectives. However, the strategy works best if you identify which objective is your primary focus. For example:
Once you determine the goals for your plan, you can start to hone in on the right program and providers.
Keep your objective in mind as you research different plans. While you may already know there are 401(k)s and SIMPLE IRAs, it's essential to view plan options from a structural perspective and consider their different obligations and opportunities for both employers and employees.
Three popular options are:
Offering a retirement plan program is a significant financial undertaking, and your company shouldn't make this decision alone. Instead, you and your financial team should reach out to advisors and retirement plan consultants. Discuss your company's ability to manage the costs of different plans, which programs best help you meet your goals, and how to structure the plan to meet everyone's needs as best as possible.
Professional employer organizations, or PEOs, are uniquely helpful in this role. PEOs have specialized insight into retirement programs' HR and financial aspects and can give you in-depth insights into the obligations, opportunities, and benefits of different options. In many cases, PEOs will also be able to provide and handle your retirement options, helping you provide the best options to your staff with little effort needed on your part.
Pay particular attention to the costs of different plans, which can include the following:
Break down the costs for each plan you're seriously considering so you can compare them. Then, choose the best option.
After the final decision has been made, you can begin to prepare your employees. Create an in-depth rollout plan to educate employees in the lead-up to enrollment. You can maximize employee engagement and benefit by giving them well-organized information across multiple channels. Depending on your PEO, they can provide seminars, digital and paper informational materials, and meetings with one-on-one advisory sessions.
Choosing and implementing a retirement plan for your organization is a substantial effort, but it doesn't end there. Make time to review your plan regularly. Check the outcomes of your plan to ensure it satisfies your primary objective, whether that's employee retention, employee financial benefits, or a third objective. You can also shop for new, comparable plans over the years to ensure the plan costs fit within your budget and provide employee satisfaction with retirement benefits.
A PEO can be your partner throughout this entire process—and beyond. These organizations can help you explore different options and may even have a network of employers so you can access more affordable plan terms. PEOs can also educate employees about retirement plan benefits, provide administrative and management services, and audit your program to ensure compliance.
Working with a PEO instead of managing the plan internally can protect your organization, make plan management as efficient and cost-effective as possible, and give you and your employees the financial peace of mind you're looking for.