Identify Your Needs

I am interested in offering my employees retirement benefits, but I’m not sure which is the best plan for us.

You’ve made a wise choice! While it may be difficult deciding what plan to offer your employees, the level of consideration you put into benefits can greatly increase employee morale. Superior job benefits rank high on the list of many employees, whether they are fresh out of school, close to retirement or anywhere in between.

Offering a retirement plan can be useful in recruiting new employees, as well as in retaining those who have worked hard for you over the years and are looking to secure their future.

By presenting your employees with an easy and effective way to save, you give them peace of mind while giving your business a competitive edge in the marketplace. In some cases, you can even deduct your plan contribution and administrative expenses from your taxes.

There are many ways to increase the retirement benefits you offer. You can establish a plan that’s best for your organization by doing the following:

Understand your employees’ needs

Your employees’ needs will probably change as they grow older, receive promotions or start a family. It is important to anticipate what your employees might look for in a plan.

If you don’t know exactly what your employees want in the way of retirement plan benefits, ask them. Their input can be obtained through company surveys, exit interviews and other sources.

Determine an accurate budget

Offering a plan can be expensive. You should consider both the funding and administration expenses of different plans before you decide which to provide. It is also important to determine employment trends within your company and the amount of money you feel your employees should contribute toward their own retirement.

Assemble the appropriate administrator

You are offering a retirement plan because you value your employees. So you probably know whether or not you have staff who can handle the day-to-day responsibilities involved in administering the plan. If you don’t have the appropriate personnel, outside professionals may be able to provide this service efficiently, accurately and economically.

Get a handle on legislative and tax regulations

So your qualified plan benefits your employees more than it benefits the government, you should take into account legislative requirements and tax guidelines. Current and pending legislation may affect your plan in many ways.

At first it may seem difficult to select just the right plan. However, with the help of your financial advisor, implementing the one that meets your company’s objectives – and the retirement planning needs of your employees – has never been easier. Consider these guidelines before making a decision.

• If you have a long-term horizon in which to fund a plan for your employees, defined contribution plans work well.
• For sole proprietors or small-business owners wishing to minimize administrative costs, a simplified employee pension (SEP) may be the right plan.
• Profit sharing is appropriate if it is important for you to maintain discretion over contributions.
• Money purchase may be the right choice if steady revenues are anticipated and maximum contributions are desired.
• For maximum flexibility, you may choose to combine a profit sharing plan with a money purchase pension plan.
• If you have many older key employees, defined benefit or age-weighted plans may be more appropriate. If you want employees to fund part of the retirement cost, a SIMPLE IRA or 401(k) plan may be most suitable.

At Raymond James, we’re proud of our long history of offering investment and financial planning services for businesses and their employees. We have well-established partnerships with some of the best retirement plan providers in the nation, offering various choices for your business and investment diversification for your employees. For more information, contact your Raymond James financial advisor or use the Office Locator to find our office(s) nearest you today.