Signs that your Company’s Retirement Plan Needs an Upgrade?

Article Written By: Josh Allen

Has your business been growing steadily? Has your team been expanding? It might be time to reevaluate whether a SIMPLE IRA still fits your company’s retirement plan needs. SIMPLE IRAs are a great starting point for small businesses.  They have very low administrative costs and come with much greater administrative ease.

SIMPLE IRAs, however, do come with limitations, such as the following:

• Plan design is limited. 

• Employee contributions are capped at lower levels than 401(k) plans.

• Discretionary contributions are not allowed, and

• Vesting features are not available.

Typically, as a company grows, other plan designs are often more appropriate.  401(k) plans, for example offer significantly higher contribution limits, more flexible plan design features, vesting options, and can even be used to selectively reward some key employees.

Also, as companies mature, recruiting and hiring the best talent might require a more robust retirement benefit. By regularly reviewing your plan features, you can minimize the risk of falling behind your competitors as you try to hire and retain your key team members.

A comprehensive plan review will consider all relevant factors.  If your current plan is still right for you, analyze the costs, educational support, plan sponsor guidance and other important elements of your investment provider.  If you need to enhance your benefit package, lower costs, generate more tax savings opportunities, or streamline plan administration, then a new plan design might make sense. 

Regardless of your needs, a skilled fiduciary professional at The Foundry Financial Group can offer you the guidance you need to select the right plan and stay current.  Independent advice from a local trusted advisor can create better outcomes for business owners, personnel professionals, and plan participants.