Retirement Plans
In today's employment marketplace, employees demand a retirement savings program in their compensation packages. Employers must find benefit programs that hold labor costs in check. Employer-provided retirement plans, such as a 401(k), are proven to help employees save for their future and meet the bottom line goals for employers.
What is a 401(k) Plan?
401(k) refers to the section of the tax code that makes this type of retirement savings possible. It allows employees to save for retirement by reducing their current earnings on a pre-federal and, in most states, pre-state tax basis.
Time Savings
Our 401(k) services give you back wasted time spent on administrative and compliance issues. Using the payroll and retirement plan data you provide, we'll administer those tasks for you. Evaluate the time it takes you to administer this program from your average day and see the savings.
401(k) Benefits
- Plan contributions made with pre-tax dollars lowers tax bracket for employees
- Tax-deferred contributions benefit from compounding interest while maturing in the protection of the plan
- 401(k) plans can play a significant role in recruiting key employees and helps build retention
- Employers may provide matching or partial funds to employees through a 401(k) plan to increase participation and increase key staff longevity
- Offers employers tax advantages - plan contributions and costs can be deducted as business expenses on corporate tax returns
Section 125 Plans
Section 125 is a section of the Internal Revenue Code that allows employees to earmark pre-tax dollars toward payment of Insurance Premiums, Medical Care, and Dependent Care expenses. The dollars used for this purpose are not subject to Social Security, Federal, or most State taxes. In effect, section 125 permits the employee to increase their net income by using dollars before they are taxed.
For Employees
Sometimes referred to as a cafeteria plan, flex plan, or a Section 125 plan, a Flexible Savings Account (FSA) lets you set aside a certain amount of your paycheck into an account — before paying income taxes. During the year, you have access to this account for reimbursement of expenses — not covered by insurance — that you regularly pay for.
Benefit to the Employer
The salary dollars employees direct to a Section 125 Benefit Plan reduce employer payroll tax costs, as those dollars are not subject to the employer Social Security contribution. In addition, lowering payroll can result in reduced Federal and/or State Unemployment Tax contributions and Workers' Compensation premiums.
Benefits
- Reduce employer payroll tax costs
- Reduce Federal and/or State Unemployment Tax contributions
- Reduce Workers' Compensation premiums