401(k) Plan - Employers" Benefit And Responsibility
401(k) plan is a unique retirement plan that is widely popular in the United States.
This plan is initiated by employers with the objective of safeguarding the financial uncertainty of their employees at the time of retirement.
401 (k) plans offer extensive benefits to both employers and employees.
Benefit 1: 401(k) plans aid in recruitment.
Providing incentives and benefits is a well-practiced strategy employed by several companies to attract employees.
These incentives can be also provided as a part of 401(k) plans as an attractive retirement benefit program.
Benefit 2: Companies design 401(k) plans with the objective of encouraging employees to contribute towards the company's profit in a better way.
Better the performance, higher will be value of employer contribution.
Benefit 3: 401(k) plans are the least expensive way of retaining employees in a company.
Any contributions made by the employer towards 401(k) plans are tax deductible expenses.
However, it is the responsibility of companies to provide a proper retirement plan for their employees.
For this purpose, companies need to research extensively for plan providers offering 401(k) plans with minimum administration costs.
According to the U.
S.
Department of Labor's Employee Benefits Security Administration, there are various aspects that need to be looked into while selecting an appropriate retirement plan.
Some of these include the features of the plan, fees, different services provided under the plan, fee variations for different types of investment options, restrictions and rules against early termination of the plan, educational assistance and customer service.
One should also look into aspects like types of investments, number of investment options and access to online service, online trading option and availability of loan facility.
Some plan providers charge a fee on the entire plan while others deduct it from the investment returns.
It is necessary to investigate the benefits and risks of both the options.
This plan is initiated by employers with the objective of safeguarding the financial uncertainty of their employees at the time of retirement.
401 (k) plans offer extensive benefits to both employers and employees.
Benefit 1: 401(k) plans aid in recruitment.
Providing incentives and benefits is a well-practiced strategy employed by several companies to attract employees.
These incentives can be also provided as a part of 401(k) plans as an attractive retirement benefit program.
Benefit 2: Companies design 401(k) plans with the objective of encouraging employees to contribute towards the company's profit in a better way.
Better the performance, higher will be value of employer contribution.
Benefit 3: 401(k) plans are the least expensive way of retaining employees in a company.
Any contributions made by the employer towards 401(k) plans are tax deductible expenses.
However, it is the responsibility of companies to provide a proper retirement plan for their employees.
For this purpose, companies need to research extensively for plan providers offering 401(k) plans with minimum administration costs.
According to the U.
S.
Department of Labor's Employee Benefits Security Administration, there are various aspects that need to be looked into while selecting an appropriate retirement plan.
Some of these include the features of the plan, fees, different services provided under the plan, fee variations for different types of investment options, restrictions and rules against early termination of the plan, educational assistance and customer service.
One should also look into aspects like types of investments, number of investment options and access to online service, online trading option and availability of loan facility.
Some plan providers charge a fee on the entire plan while others deduct it from the investment returns.
It is necessary to investigate the benefits and risks of both the options.
