As a small business owner, you have a responsibility to give your employees a great working experience. Furthermore, most workers expect their employers to offer retirement benefits in one form or another.
One of the most common retirement perks is that of the 401k plan. 401k plans, and other retirement options, come in many different types. One of the most common plans is the standalone 401ks, which are single 401k plans that exist solely within one company.
However, a recent retirement planning trend that appeals to many small businesses is the Pooled Employer Plan. A Pooled Employer Plan is a retirement plan that cleverly combines the resources of multiple small businesses, each of which has no relation to one another.
Why Choose a Pooled Employer Plan Over a Standalone 401k?
Depending on your unique situation, a standalone 401k may be a good choice for your business. After all, these plans allow employees considerable amounts of flexibility in their retirement planning.
However, these plans also come with some serious downsides. First off, employers bear the brunt of responsibility for these plans. Business owners have to ensure that all filing deadlines are met and that there is no favoritism within the plans. If a business owner would miss a deadline or fail one of the IRS compliance tests imposed on all 401k plans, the consequences could be dire.
Thankfully, a Pooled Employer Plan takes this stress away from business owners. Pooled Employer Plans are managed by a group known as a Pooled Plan Provider, or PPP. These entities take care of all deadlines, filing, and other considerations so that you can focus on the many other aspects of your business.
Benefits of a Pooled Employer Plan for Employees
Employees, for their part, benefit greatly from a Pooled Employer Plan. Specifically, employees can enjoy the many perks of a PEP such as lower costs, incredible financial learning opportunities, and fantastic services available to plan members.
As a Small Business, You Need a Pooled Employer Plan
In the end, there are few reasons why any small business owner would choose not to enter into a Pooled Employer Plan. As was discussed earlier, these plans decrease the responsibility and stress of the business owner with regard to retirement planning, improve the options for employees enrolled in the plan, and combine the resources of multiple businesses in order to provide compelling plan incentives.
Depending on your specific business and industry, you may have a reason for wanting to stick with a standalone 401k. However, the vast majority of small businesses would benefit from switching to or joining a Pooled Employer Plan for the many reasons stated throughout this article.
Are you ready to make the leap and provide your employees with excellent retirement planning options? If so, contact a plan provider today. They will walk you through the process of joining a Pooled Employer Plan and can help you every step of the way. Don’t delay! Contact a plan provider like Ubiquity now!