401k

"We have been working with BenefitsMart since 1993. Our company has gone through many changes and has grown dramatically while adding several new locations. BenefitsMart has guided us with their research and knowledge of the insurance and 401k markets. As a result we have been able to maintain an affordable benefits package for our employees. Our relationship with them has strengthened as we have learned to rely on their outstanding customer service. Their combination of knowledge, experience, integrity and service is very rare. We would recommend them to anyone who has questions about employee benefits."

Maurice Maher
Controller
Robert Abel & Company

To help employees plan for retirement, many companies offer 401(k) plans. A 401(k) plan is a tax qualified retirement plan. The dollars employees contribute to a 401(k) are pre-tax dollars, deducted from their salaries before federal income taxes are withheld. The contributions are 100% vested for employees, but are treated as employer contributions and are therefore a tax-deductible expense for the employer. Since the introduction of the 401(k) in 1978, these plans have gained enormous popularity with employers of all sizes.

A 401(k) can be designed in one of three ways to meet your company’s needs. Whichever arrangement you choose, a 401(k) is a flexible and cost-efficient retirement plan.: Salary deferral only – limit expenses with a plan to which only employees contribute.; Employers match – choose to match a certain percentage of your employee’s contributions.; Profit sharing – makes discretionary contributions in addition to employee deferrals and/or company matching contributions.

Improved employee morale and increased loyalty are two of the most important results of offering a 401(k). A 401(k) plan can also be valuable in recruiting and retaining employees – especially key employees.

Your 401(k) plan must not discriminate in favor of highly compensated employees. Each plan must be tested annually to insure that this feature is maintained. (The rules are constantly changing and you should seek advice on the current rules)

A 401(k) plan allows many companies to offer a valuable benefit to their employees at a minimal cost. Even an employer match arrangement allows the company to control the cost of the retirement plan. Employers generally match anywhere from 10% to 100% of employee contributions to the plan – the level of match is entirely up to the employer.

Let BenefitsMart help you find the right plan for your company.

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