Retirement
401(k) Program
This is a retirement savings plan, allowing an employee to save for retirement while deferring current income taxes on the saved earnings until withdrawn. 401(k) plans offered by PEOs usually have lower administrative costs than others. It also allows for seamless integration with payroll deductions.
- - 401(k) Education & Communication Services: PEO 401(k) providers provide employees with comprehensive information regarding their 401(k) services. This includes everything from basic information on 401(k) as well as investment advice. The level of service provided will vary depending on the PEO, as well as the amount of assets included in the plan. Most PEO 401(k) providers will come on-site to add a personal touch for employees.
- - Investment Education: PEO 401(k) providers will typically provide various mediums to educate employees on their options. This includes everything from online tools, investment publications, and one-on-one advice. Investment education will improve 401(k) participation and add-value to company owners.
- - 401(k) Participant Statements: PEOs provide statements on 401(k) participation that is useful for auditors and other investment professionals.
- - 401(k) Investment Options
- - Plan Audits/5500 Tax Filing: PEOs are the fiduciary on their clients’ 401(k) plans and provide annual 5500 reports and no additional cost. For employers with over 100 employees they also provide 401(k) plan audits which can cost up to $15,000 for employers that do not use a PEOs; for PEO customers the cost of plan audits are typically included in their administrative fee.
Safe-Harbor Options
401(k) Safe-Harbor plans encourage employee participation by mandating that employer contributions to the plan are 100% vested. The added participation usually provides more leniency for setting up plans, as the concern for discrimination towards higher compensated employees is diminished.
