Samuel P. Irvine, CFP®, CRPC®, Financial Consultant/Investment Advisor

Angella N. O’Hara, ChFC®, FPQP™, Advisor/Operations Manager

Small and medium-sized business owners often assume that if they’re offering a retirement plan for employees, they’re ahead of the game. But if you’ve simply set up a plan to check it off the list, you may not be maximizing the benefits for your employees or yourself.

When managed well, employer-sponsored retirement plans such as 401(k) plans and cash-balance plans can: 

• Increase tax savings for employers
• Minimize costs for employers
• Help recruit and retain high-performing employees
• Increase tax deferrals for employees and their families

New York and other states are currently considering new laws that will require employers in business more than two years, and with more than 10 employees, to offer retirement plans. But if you simply check the box that you’ve set up a retirement plan, you and your employees may be missing out on the rich benefits a well-managed plan can provide.

Why Consider Active Retirement Plan Oversight?

Managing an employer-sponsored retirement plan is extremely complex and can bring administrative headaches. There are a number of regulations, deadlines and reporting requirements involved in managing a retirement plan. 

While there are off-the-shelf options for complete plan management, they often come with high fees and are not customized for your particular organization’s needs. On the other hand, working with a consultative retirement plan administrator can remove those administrative burdens, while also ensuring that you have the right plan setup for your needs and are taking advantage of all the potential plan benefits. 

In addition, in a competitive labor environment, an actively managed retirement plan can be an added perk to help you attract and retain employees. Rather than simply offering the easiest 401(k) option, such as a plan that is bundled with your payroll services, you can entice top-notch employees with a customized retirement plan that is designed to meet the individualized needs of your business and your employees.

What Should Active Plan Oversight Include?

Many retirement plan administrators simply use a one-size-fits-all approach. They set up the same 401(k) plan for every small or medium-size business that comes along, often bundling plan administration with payroll services. 

However, working with a firm like Davie Kaplan that can provide customized consultative services offers business owners much more. By taking a consultative approach to plan development and administration, Davie Kaplan advisors can provide holistic retirement plan services. Those services include:

• Assistance in selecting the right plan. A personal advisor takes time to talk with business owners about their objectives for an employer-sponsored retirement plan. Maybe you want to simply meet the potential state requirements, or maybe you want to maximize tax savings, or provide a robust employee benefit to help you recruit and maintain the right workers. There are a number of different plan options, including SEP, Simple IRA, cash-balance and 401(k). The right plan depends on your goals, the size of your business, and your long-term business plan. At Davie Kaplan, we specialize in helping you determine the right type of retirement plan to meet all your objectives. 
• Help with maximizing tax benefits. Generally, employers gain some tax advantages by offering and contributing to an employer-sponsored retirement plan. But there are often opportunities to capture more than the standard tax savings through strategic retirement plan administration. At Davie Kaplan, our retirement plan administrators, financial advisors and tax professionals work side by side, and collaborate to help clients maximize the available tax benefits through their retirement plan administration. 
• Cutting costs. Administering a retirement plan may be a required business expense, but some plan designs cost significantly more than others. Davie Kaplan advisors can consult with you to design a plan that will meet your goals while also cutting plan costs.
• Employee education. A consultative retirement plan administrator will provide education for your employees, helping them understand the importance of contributing to the plan and offering advice on plan selections. When an employee has a question about your retirement plan, they can call your plan consultant and get personal, customized input and advice. 
• Ongoing communication. Your plan administrator should also communicate regularly with you and your employees about changes and updates to the plan, how current economic news might affect your plan, and other pertinent information. 

What Is Required to Get Started? 

Developing and administering a customized retirement plan may seem like a daunting process, but it’s surprisingly straightforward and effective when working with the right consultant. . Revamping your existing 401(k) plan or designing a new plan does not require a significant amount of time or administrative lift on your part. 

When you share a few documents from your existing retirement plan, Davie Kaplan advisors can start investigating to determine which options may better meet your needs and save you money. We begin with a review of: 

• A plan census
• A summary plan description
• The name of your payroll provider, as payroll integration may be possible

To learn more about Davie Kaplan’s retirement plan administration and consultative services, contact us today to get started.

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