The Best Retirement Plans for Employers

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    401k Plans

    • A 401k plan is a plan which is set up to benefit the employee by allowing contributions from both the employer and employee for the benefit of the employee. You may match your employees' contributions to the plan thus helping to fund their retirement. This plan is best when you want to offer benefits to your employees, but cannot afford to fully fund the employees' retirement for him.


    • A Savings Incentive Match Plan (SIMPLE) and Simplified Employee Pension (SEP) is a plan where you set up a retirement plan for your employees and make contributions to the plan. A SIMPLE plan requires that you match the employees' contributions $1 for $1 up to 3 percent of the employees' compensation for the year. You may also make a contribution of 2 percent of the employee's compensation regardless of their contribution amount in lieu of the matching contribution. A SEP IRA requires that you make the entire contribution for the employee. You do not have to make a contribution every year, but when you make a contribution the contribution must be the same for all employees. These plans are best when you can afford to make additional, consistent, contributions or when you want to fully fund the employees' retirement (in the case of the SEP). Additionally, these plans carry a lower cost than 401k plans, saving you money. They're meant for smaller employers with fewer than 100 employees.


    • A pension is a retirement plan funded by you. The most basic pension is a defined benefit plan. These plans may take the form of a fully insured plan, like a 412i plan or a non-insured plan. A fully insured plan must invest in fixed life insurance and annuity policies for all of the retirement investments, while a non-insured plan may diversify out of insurance policies. These plans may be expensive, but ultimately provide significant benefits to your employees as they generally promise a minimum benefit to your employees when they retire. These plans are best when you want to fully fund your employees' retirement and have sufficient cash flow to do so.

    Non-Qualified Plan

    • A non-qualified plan is not subject to the rules and regulations of pensions, 401ks and IRAs. You may discriminate in terms of who benefits are offered to. You may offer bonus plans to executives or select individual employees to offer benefits to. You do not need to offer benefits to all employees or even a majority. These plans are best when you want to provide additional compensation to select or key employees within the company.

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