A recent study estimated that, by 2050, the retirement income gap – defined as the difference between what individuals should save and what they actually save – will reach $137 trillion.
While there are many culprits, the ongoing economic downturn has made saving money more challenging for the average employee. As consumers experience rising costs for many essential products, good and services, the cost of doing business has increased as well.
As a savvy business owner in today’s climate, it is likely that you have already recognized the value of providing an employee retirement plan for your company. These plans have grown in popularity as concerns linger over the future of Social Security benefits. In fact, it is predicted that soon, the majority of individuals who will retire in 6 major economies, including the United States, will outlive their savings by 8 to 20 years.
It comes as no surprise that 4 in 5 employees participate in their employer’s 401K plans. Sadly, the Bureau of Labor Statistics reports that only 45 percent of part-time workers are offered a 401k or similar savings plan. This has been a significant concern for federal lawmakers in recent years.
Can your employees count on you to help them save for their future?
How SECURE 2.0 Affects Your Employee Retirement Plan
Before you pick out a plan or talk to the experts about the best possible option for your employees’ future, here’s what you need to know about recent legislation that will impact your choice.
Originally passed by Congress in 2019, the Setting Every Community Up for Retirement Enhancement (SECURE) Act was modified by the Consolidated Appropriations Act of 2023 at the end of December 2022. This brand-new law is known as SECURE 2.0 and includes over 90 new provisions and updates to federal rules governing retirement plans.
SECURE 2.0 is aimed at simplifying and clarifying the rules for retirement plans, encouraging more employers to offer retirement plans to expand coverage, and increasing the number of individuals actively saving for their retirement in the United States. The goal is that these sweeping changes will lessen the retirement savings gap by offering new benefits to both employers and employees. For example, SECURE 2.0 makes tax credits available to certain small businesses to offset the start-up costs of establishing a first-time retirement plan.
There are very few companies and individuals that these changes will not impact. Most provisions have exclusions and exceptions, and penalties and fines will be issued for noncompliance. Reviewing and conferring with knowledgeable professionals like Integrity Employee Leasing is essential to ensure your business is in compliance. For example, some of these provisions go into effect immediately and others begin over the next couple of years.
- Automatic Enrollment
- Roth Designation Optional
- Eligibility of Part-Time Employees
- Employee Incentives
Integrity Offers FREE 401K Retirement Plan to First-Time Clients
Overwhelmed by detail? Integrity Employee Leasing is here to help you easily navigate the changes and opportunities offered by the SECURE 2.0 Act. By seeking further guidance and understanding of how these new federal rules specifically impact your company, you set your organization up for long-term success while remaining competitive in today’s job market.
For a limited time, Integrity Employee Leasing is offering a free 401K for any clients who have not yet partnered with us for an employee retirement plan.
In addition to joining for free, partnering with Integrity for your 401K plan requires minimal participation as an employer. Administered by our HR management team, our multi-client 401K retirement plan is cost-effective for your business. Furthermore, we manage year-end testing and the mandatory federal reports that keep the asset contributions ERISA-complaint.
Don’t miss this tremendous opportunity for 2023, while your company’s ability to attract and retain top talent is critical. Enhancing your benefits package with an exceptional 401K plan is a great way to draw prospective hires toward your business.
Contact Integrity Employee Leasing at (941) 625-0623 to get started today. Our team would be happy to answer your questions, and we are ready to crunch numbers to secure your business. Schedule your consultation today, or explore our website to find out how Integrity can help you with human resources services, insurance products and more.