construction; government contractor and technology; not-for-profit; real estate; emerging growth companies
business advisory
Abstract:
Automatic enrollment 401(k) plans not only benefit the employees, but also assist employers with compliance and recruitment efforts, among other things. For example, every 401(k) plan must pass non-discrimination compliance tests set forth by the IRS. These tests investigate the percentage of salaries deferred into a 401(k) plan for employees at various income levels. To avoid significant penalties, companies must meet certain non-discrimination requirements by ensuring that a certain percentage of non-high salaried employees are enrolled in a 401(k) plan.
On the other hand, companies that comply with non-discrimination standards reap yearly tax-preferred benefits. By implementing an automatic enrollment feature, companies are likely to have greater success retaining lower salaried employees as participants in a 401(k) plan and therefore have an easier time complying with the applicable regulations.
By implementing an automatic enrollment feature on their 401(k) plan, companies are likely to have greater success retaining lower salaried employees.
There are other benefits of adopting an automatic enrollment 401(k) plan from recruiting skilled employees to reducing cots. But how can you control your costs when implementing an automatic enrollment 401(k) plan? To learn more, download the full article below.