As a small business owner, offering a competitive employee benefits program will not only help you retain your current employees, but it will also help recruit new talent to grow into the future. Whether you already have a retirement plan in place for your employees or you’re looking to start one next year, here are five strategies to consider:
1. Focus on Retaining Retiree Assets and Getting New Participants
People who are nearing retirement may be inclined to withdraw their assets from the plan. This can result in negative cash flows for your employer-sponsored plan. Not only that, but retirees who are ready to withdraw from their nest egg might be better suited taking cash from other retirement savings accounts first before dipping into their qualified plan assets.
Continue to educate your plan participants about contributing to their plan, and for retirees, highlight the importance of keeping their assets in the plan. In your next participant education meeting, consider giving a presentation to soon-to-be retirees about the benefits of keeping their assets in their 401(k) as a way to boost their own retirement savings.
As baby boomers retire, see if your advisor can help you educate your younger employees to start contributing to help shore up their assets that will be leaving the plan.
2. Offer Health Savings Accounts (HSAs) to Your Employees as a Benefit
A health savings account (HSA) is an attractive benefit to offer to employees. Contributions and withdrawals for medical reasons are tax-free. People can also use HSAs to supplement their retirement savings. But in order for it to be both tax-free and penalty-free, a distribution must be for qualified medical expenses.
3. Offer Financial Education and Wellness Outside of Just Retirement Topics
A big trend for a lot of companies is offering wellness services to their employees.
Instead of just educating your employees about saving for retirement, you can offer them education for different life stages. For instance, if you have millennial employees who are saving to buy a house or for their child’s college education, you could offer financial advice for those topics, outside of just saving for retirement. Try viewing financial wellness holistically, instead of just focusing on retirement. There are many things that affect your retirement-readiness.
4. Focus on Educating Employees Who Don’t Currently Participate in the 401(K) Plan
There are many reasons why employees don’t participate in a 401(k) plan — some might think they don’t have the funds to contribute.
However, employees could just contribute one percent of their paycheck now, and contribute more as they make more money.
If you just put one percent of your paycheck away right now, you probably won’t even notice it’s gone. The important part is that your employees get started today. Teach employees the importance of saving for retirement and how to budget.
5. Offer Sustainable and Socially Screened Investments (SSI), or Environmental, Social and Corporate Governance (ESG) Screened Strategies
People are becoming more socially conscious of where they’re investing their money. Consider polling your employees to see if they’d be interested in having their 401(k) plan being allocated away from non-socially responsible companies.
Do you need more advice on how to boost your business’s benefits program? Contact our team today.