Changes Aren’t Always Bad…

Recent law changes are having a dramatic impact on how employers can and should use 401(k)’s in their practice. These changes have the possibility to increase the recruitment and retention of valuable employees whether they be professional staff or lay staff.

30% of employers do not even offer a 401(k) plan. A state of the art 401(k) plan can help differentiate you from the rest of the herd. Let us help you design a state of the art plan.

Here’s what you need to Know…

  • 100% of eligible costs associated with starting a defined contribution or defined benefit plan.

    Employer Contributions for employees whose wages do not exceed $100,000. Maximum credit per employee is $1,000.

    Employer Contribution Phases out over 5 years:

    Year Plan Established: 100%

    2nd Plan Year: 100%

    3rd Plan Year: 75%

    4th Plan Year: 50%

    5th Plan Year: 25%

  • Previously, employer contributions were only available pre-tax. Now, employers can allow their employees to elect for contributions to be on an after-tax or pre-tax basis.

    The employer may deduct the Roth, after-tax contributions; but the employee takes the Roth contributions as Income.

  • Employers with 401(k), 403(b) or SIMPLE plans have the option to make matching contributions on their employees’ qualified student loan payments.

    Student loan payments may be treated as elective plan contributions for purposes of determining employer match.

Want to know more? Hear it from us!

Secure Act 2.0 has brought about dramatic and beneficial changes to the run-of-the-mill retirement plans of yesterday.

Below is a video our firm has put together to help explain part of the changes and highlight a few of the enormous benefits. Employers who pay attention to these changes will have an advantage on other employers who choose to ignore these new and innovative allowances.

Perhaps the best news is that for the next few years you will be paid - in the form of tax credits - for virtually everything you spend including matching contributions for all employees who make less than $100,000 per year!

We stand ready to help you revive and revise your existing plan, or even create a whole new one to take advantage of these dynamic changes. 

Don’t get stuck with your momma’s 401(k) plan!

We’ve been published!

Check out our article covering the Secure 2.0 Act - exclusively published with EquiManagement!

 

Source: Mass Mutual. Secure 2.0 ACT of 2022 Summary, 20 Jan. 2023, pp. 1–22.