Business Owners: Are Your Employees Retirement Ready?

A well-structured, industry-competitive retirement plan is more than just an element of your benefits package. It can bring greater peace of mind and sustainability in a future where Social Security and pension plans probably won’t be enough. And it can mean financial confidence and stability for the people who keep your business running every day.

But when is the last time you took a hard look at your plan? Is it still optimized to meet your needs and your participants’ needs?

With 2018 in full swing, now is a good time to take a step back and identify potential gaps, opportunities and areas for improvement within your retirement plan. Your analysis should consider four key components:

Business Owners: Are Your Employees Retirement Ready?

1. Investment Lineup

Are your plan investments well-diversified? How are the funds performing and are they well-diversified? Take this opportunity to reflect back on your investment policy, evaluate your lineup and make sure it’s meeting the goals and objectives of your participants.

2. Employee Participation Rate

How many of your employees are actually participating in the retirement plan? Is the participation rate lower or higher than similar-sized plans within your industry? Depending on the results of this exercise, you may want to brainstorm strategies for boosting company-wide plan participation in 2018.

3. Employee Contribution Rate

How much are employees deferring into the retirement plan? If the company-wide contribution rate is low, it could mean that participants may not meet their retirement savings goals.

You should also drill down a bit deeper and compare contribution rates for highly compensated and non-highly compensated employees. This evaluation can help you prepare for non-discrimination testing by the IRS and ensure your plan is structured to allow all employees to contribute in a meaningful way.

4. Fees

As a fiduciary, it is your responsibility to ensure your plan fees are fair and reasonable, so this is one of the most important elements to analyze. Benchmark your retirement plan fees and expenses to see how they stack up to similar-sized plans within your industry, and to those charged by other providers.

The key ingredient to the long-term success and sustainability of your organization is also your most valuable business asset: your employees. The right retirement plan solution can enrich their lives, while also helping you boost retention and engagement.

Want a second opinion on your plan? Hewins Financial | Wipfli Hewins can provide you with a competitive, in-depth analysis of your current retirement plan for absolutely no cost. Contact our team for more information.

 

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Wipfli Financial Advisors, LLC (“Wipfli Financial”) is an investment advisor registered with the U.S. Securities and Exchange Commission (SEC) under the Investment Advisers Act of 1940. Wipfli Financial is a proud affiliate of Wipfli LLP, a national accounting and consulting firm. Information pertaining to Wipfli Financial’s management, operations, services and fees is set forth in Wipfli Financial’s current Form ADV Part 2A brochure, copies of which are available upon request at no cost or at www.adviserinfo.sec.gov. Wipfli Financial does not provide tax, accounting or legal services. The views expressed by the author are the author’s alone and do not necessarily represent the views of Wipfli Financial or its affiliates. The information contained in any third-party resource cited herein is not owned or controlled by Wipfli Financial, and Wipfli Financial does not guarantee the accuracy or reliability of any information that may be found in such resources. Links to any third-party resource are provided as a courtesy for reference only and are not intended to be, and do not act as, an endorsement by Wipfli Financial of the third party or any of its content or use of its content. The standard information provided in this blog is for general purposes only and should not be construed as, or used as a substitute for, financial, investment or other professional advice. If you have questions regarding your financial situation, you should consult your financial planner, investment advisor, attorney or other professional.
Erika Young
Erika Young

CRPS®, CPFA, AIF® | Partner in Charge of Human Capital Management Services, Wipfli LLP

Erika Young, CRPS®, CPFA, AIF®, is the Partner in Charge of the Human Capital Management services group at Wipfli LLP. Erika specializes in retirement plan design and assessment for start-up companies, nonprofit organizations and small-to-medium-sized businesses. She also provides expertise on ERISA compliance, reporting and regulatory standards.

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Business Owners: Are Your Employees Retirement Ready?

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