09/ 01/ 2005
from the Department of Labor
It’s never too early for employees to start saving for retirement. Though American small businesses employ over 40 percent of the private workforce in the United States, many do not have retirement savings programs in place for employees. Small businesses interested in offering their employees retirement savings benefits can learn more about the various options available by using a U.S. Department of Labor Web resource. DOL’s Small Business Retirement Savings Advisor summarizes the various options available to small businesses.
Not only are many plans designed with small businesses in mind, but most retirement savings programs are also easy to manage and provide employers with financial incentives, including tax advantages. In fact, small businesses can offer their employees at least seven different types of retirement savings plans. The DOL Advisor has a question-and-answer feature that helps employers determine which option is most appropriate for their business based on relevant factors, such as staff size and whether they want contributions to be made by the employer only, employee only or both.
The retirement options range from plans in which the employees only contribute to their retirement plan (Payroll Deduction IRA) to plans where both the employer and employee contribute (401(k), Simple-IRA, Defined Benefit) or plans where only the employer contributes to the employee’s retirement savings account (SEP-IRA, Profit Sharing, Money Purchase Plan). Additionally, each plan has different advantages and contribution allotments. Find a useful chart comparing each plan’s benefits, eligibility requirements and contribution responsibilities at the DOL’s Comparison of Retirement Savings Accounts for Small Businesses page. Each plan also has different reporting requirements. To evaluate the administrative work involved with establishing and maintaining retirement savings accounts, visit the DOL’s Small Business Retirement Savings Advisor page.
DOL’s Employee Benefits Security Administration (formerly known as the Pension and Welfare Benefits Administration) administers private pension plans, with its primary mission being to protect the benefits of millions of participants and beneficiaries. Besides overseeing the plans, it also offers education programs to both employers and employees to help them make the best retirement savings decisions. Find more detailed information, including the tax savings from retirement saving accounts, at the Department of the Treasury’s Internal Revenue Service.
Sites to visit:
DOL’s Small Business Retirement Savings Advisor
DOL’s Employee Benefits Security Administration
Internal Revenue Service––Retirement Plans Community
DOL’s Comparison of Retirement Savings Accounts for Small Businesses
