401k Plan
>
Quality Employees
Part I - Attract Quality Employees with a 401k
Retirement Plan
by
Bruce Fenton, Founder and President of Atlantic Financial
A company's growth is only as good as its employees. With salaries and
benefits of high-quality employees increasing at a rapid rate, even
small companies need to provide modern benefits if they are to compete.
One of the most important and common benefits is a retirement plan such
as a 401k, Keogh or
Defined Benefit Plan.
The 401k plan is by far the most popular due to its low cost to
employers and high popularity with employees. Entrepreneurs and senior
managers often have difficulty juggling the responsibilities of growing
their business with the selection, evaluation and ongoing monitoring of
employee benefits. Despite the drain on time, the responsibility is not
to be taken lightly. A poorly set up 401k retirement plan can cause a
level of unhappiness and resentment among employees far worse that if
you had no 401k retirement plan at all. Worse, anyone setting up a 401k
retirement plan and acting as trustee becomes a fiduciary and is subject
to several legal responsibilities. The penalties for not complying with
these legal responsibilities, such as Department of Labor and Pension
Welfare Benefits Administration penalties can be stiff. A common
Department of Labor penalty is to fine the trustee one third of the plan
value for compliance violations.
On the bright side, properly set up plans can run smoothly with a
minimal amount of effort by the entrepreneur or manager and can increase
happiness and loyalty for employees for many years to come.
For companies setting up a plan for the first time, the most common
primary concern is cost. The startup costs of 401k plans range from $500
to over $5,000 with an additional charge ranging from $10 - $150 per
person. In some cases, the most expensive plans are the ones that can
cause a business owner the most headaches, however in many instances,
you get what you pay for. Trustees who find themselves pulled in many
directions with running a company should consider plans that provide
features designed to save the company time. It is also advisable to
coordinate your payroll deduction and 401k deposits into the plan with a
payroll company. This is not to say that you should necessarily use the
in-house 401k plan offered by your payroll company. Since these plans
are often tangential business for payroll companies, you may not to
receive that same amount of expertise and support you would get by
working with a qualified investment firm or mutual fund company. The
firm you select to manage your plan should be a mutual fund company or
investment firm who is registered as a member of FINRA, you can also
check their complaint file by calling
FINRA or visiting
FINRA web site.
Plans that are usually the most streamlined are those known as bundled
plans, meaning that the administration and investment functions are
bundled together into one convenient package. These plans often cost
more than unbundled plans, those plans in which you select one company
for investment work and another for administration. With bundled plans,
you have only one place to turn for problems that may arise with your
plan. Employers can also save time by selecting an investment advisor
who provides services such as answering employee questions and
enrollment of new employees. Many times such advisors are compensated by
the fund companies who offer 401k plans so it isn't usually necessary
that the entrepreneur pay extra money for an advisors services. Savvy
employers may be able to convince an investment professional to provide
discounted commissions and financial planning services to all employees
outside of the 401k plan activities. An investment counselor eager to
receive the 401k business of a fast-growing employer will provide such
additional incentives. This enables the employer to offer financial
planning as another employee benefit without additional cost to the
company. Purchased as a separate benefit, financial planning services
for employees may cost between $30 and $150 per employee, often with an
additional hourly surcharge.
Want to see what Atlantic Financial can offer your company through a
Fidelity Advisor 401k Plan?
Click this PDF document
Fidelity Investments Fidelity Advisor 401k Plan Proposal Atlantic Financial
PDF
Contact Atlantic Financial, Inc
If you would like Atlantic Financial to assist you with your corporate
401k plan or answer any questions you may have, please call Atlantic
Financial at 1-800-559-2900,
email Atlantic Financial (please be sure to include your name and
phone number in your email), or contact us
See also
401k education programs for employees
