Optimizing Your Retirement Plan to Recruit and Retain Top Talent

 In Articles

retirement benefitsWhen done right, a corporate retirement plan can play a key role in attracting the industry’s best and brightest. Done poorly, and it can overextend the company to the point of no return.

Fresh talent comes with a price, and that price often comes in the form of benefits. Instead of investing in a rigid retirement plan that requires regular changes as the company grows, an enterprising company owner should consider investing in a plan specifically designed to grow with that company.

What is Right for Your Company?
Recruiting top talent is a challenge in any industry. These individuals are not just searching for jobs; they are looking for a steady and secure future as well as a collaborative and comfortable environment.

    • Why Retirement Plans?
      Retaining that talent is the dream of every company. Enticing retirement plans—even something as simple as funding your retirement plan through payroll deductions—give employees the comfort of knowing they are securing their future without needing to worry about taking valuable dollars from their families’ finances.


  • Types of IRAs
    Learning all the various types of IRAs are available for companies to incorporate into their employee benefit programs. Closely held businesses should focus on IRA plans that have the ability to grow with their companies.Here are the four main types of IRA plans:

      • Traditional IRA
        Perhaps the biggest incentive for traditional IRAs is the ability to deduct contributions. Another benefit is that profits from investments are not subject to tax while the money remains in the IRA. While the IRA holder DOES have to pay taxes on distributions, the ability to avoid taxes on gains means profits can be reinvested back into the plan. Employers can offer these plans as trusts, and they can serve as a great incentive. Traditional IRAs can be a bit complicated to set up since an employer needs to create a trust to offer them. However, prospective employees may find them attractive, even though there are contribution limits.


      • Roth IRA
        In some ways, Roth IRAs are the inverse of traditional IRAs. For example, Roth IRA contributions are not deductible the way they are with traditional IRAs, but if certain requirements are met, qualified distributions are tax-free. Trouble is, Roth IRAs are not typically offered by employers because of the complexity in setup. Employers can contribute to a Roth plan, but only under certain conditions.


      • SEP IRA
        SEP is short for Simplified Employee Pension. SEP plans allow employers to set aside money in retirement accounts for their employees and themselves. Besides the significant income it can make available for recipients at retirement, it also is attractive for employees: startup and operating costs are minimal, it allows for a contribution of up to 25% of an employee’s pay, and there are no filing requirements for the IRS. The downside is only the employer contributes to the plan and the employer must contribute equally to all employee plans.


      SIMPLE is actually an acronym for Savings Incentive Match Plans for Employees. This type of plan is great for small- to mid-sized businesses in a high-growth stages. These plans are easy and inexpensive to set up and operate and employees share in the retirement contributions. Employers match between 1% and 3% of the total annual employee contributions. This type of plan can attract employees because they are 100% vested in the plan, meaning they have sole ownership of all their SIMPLE IRA money.

There are other types of retirement plans, of course, such as the 401(k) for business entities and 403(b) plans for non-profits. These traditional forms of retirement planning come with their own pros and cons for employers. While 401(k) plans can be the most attractive retirement benefits available since they are employer sponsored and employer matched, they can also be expensive to operate and time-consuming to manage.

What is Right for You?
Company owners need to satisfy their personal needs, as well as the needs of their employees. Developing a corporate retirement package—at any stage of the business—is essential for attracting high-quality employees and retaining them for the long-haul.

Choosing the right retirement plan for yourself and your employees can be overwhelming. Simon Lever, LLP is here to assist you every step of the way. Contact us today to start a conversation and see how we can help you overcome the challenges of choosing the right retirement plan for your company.

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