Should You Offer Your Employees Retirement Benefits?

1
Should You Offer Your Employees Retirement
Benefits?
2

• As with offering your employees health insurance
  coverage, offering retirement benefits is a great
  way to boost your compensation package, and both
  attract and retain a valued workforce. In some
  instances, small business owners can even take
  advantage of retirement plans for themselves.
• If youre not sure whether offering retirement
  benefits to your employees is worth it, here are
  some of the advantages associated with doing so
• Enjoy tax advantages for your business
• Congress wants to encourage employers to offer
  retirement benefit packages to employees, so
  there are some significant tax advantages to be
  had when you do

3

• Keep your employees working hard for you
• Research has shown that retirement benefits based
  on profits, can make employees more motivated
  within their role and more inclined to work
  harder and more effectively
• Attract the best employees for the job
• When it comes to attracting new employees, a
  retirement package may be the thing that makes
  them want to come and work for you, and not
  another company

4

• Supplement your compensation package
• Many small businesses have high start-up costs or
  little cashflow, but with a retirement plan, you
  can use it to supplement your compensation
  package
• Save for your own retirement
• Offering retirement benefits to your employees
  allows you to also take advantage of them and
  save for your own retirement

5

• Do you need professional guidance when offering
  retirement benefits?
• With the complexities of pension rules and
  bewildering tax aspects of retirement plans, its
  never a bad idea to seek professional help when
  offering retirement packages to your employees.
  That said, you should try to have a basic
  understanding of the different plan types and
  determine why you want to offer a plan, before
  consulting with a tax advisor or accounting
  professional
• All pension plans are one of two types
  qualified or non-qualified, but they can be
  further divided into the broad categories of
  defined benefit and contribution plans, and
  hybrid plans.

6

• If a retirement plan qualifies, it will meet the
  Employee Retirement Income Security Act of 1974
  (ERISA) and Internal Revenue Code requirements,
  while also being qualified for some hefty tax
  benefits
• Any income the plans assets generate, is not
  subject to income tax because the income is
  earned and managed within the framework of a
  tax-exempt trust
• Employersare entitled to current tax deductions
  for contributions to the plan.
• Participants of the plan are not required to pay
  income tax on the amounts contributed on their
  behalf, until the year that the employer
  distributes the funds to them

7

• In some instances, qualified plan beneficiaries
  are given special treatment when it comes to
  their taxes
• If a retirement plan doesnt qualify, it will not
  meet the requirements of ERISA and the Internal
  Revenue Code, and beneficiaries are not permitted
  to take advantage of preferential treatment when
  it comes to their taxes.
• The majority of small business owners opt to
  offer their employees a retirement plan that is
  qualified as an employee benefit, and this is
  simply down to its tax advantages. However, if
  you would like to discuss your options in further
  detail, you can consult with an accounting
  specialist.

8

• Apollo Payroll is dedicated to delivering expert
  advice, responsive service, and highly accurate
  payroll processing and reporting to ensure the
  success and growth of the business that we serve.
  Our services include comprehensive payroll
  services in Homestead and other cities in
  Miami-Dade County, employee background check and
  group health insurance in Miami Coral Gables