We already wrote about the importance of employee benefits. So, which type of employee benefits plan do you offer? Our main area of expertise is financial planning. Therefore let’s take a look at the long term financial benefit options you have. There are several types of employee benefits plan, which help your employees reap future financial security.
Types of Employee Benefits Plans
1. DASH 401(k) Plans
This is a Double Advantage Safe Harbor Plan. The benefit of this type of plan is that it combines the best of a traditional 401(k) and a profit sharing plan. However, this type of a plan cannot be setup by individuals. The only way a person get this plan type is through you, the employer. Reason is that it requires employer participation in contributions. DASH plans are ideal for small and medium size enterprises, where the employer compensates workers at various pay levels.
2. Defined Benefit Plans
The word defined describes retirement benefits. The most popular types of these plans are a 401(k) and 403(b). In the defined benefit plans, the employee benefits are calculated taking into consideration multiple variables. The main 2 are salary level and length of employment. You, the employer has to sponsor these plans. While other retirement funds are dependent on market or other investment performance, the defined benefit plans provide your employees with a guaranteed figure.
3. Fully Insured DBP
Fully insured plans are defined by Section 412(e)(3). There are a lot of variables that go into setting up this type of a plan, mostly similar to the Defined Benefit Plan. You the employer can be the sole sponsor of such a plan. They are usually set up using an annuity, or a combination of an annuity and a whole life policy. These plans are subject to IRS employer contribution limits, which can change annually. But they do allow greater contributions for older employees.
4. Profit Sharing Plans
These types of plans also allow for employer contributions only. Their advantage for the employees is that they give them the opportunity to share the company’s profits. Contribution levels are based on quarterly or annual earnings calls.
5. Safe Harbor 401(k) Plans
These plans are the most popular versions of the 401(k) small business go to today. What separates them from the traditional 401(k) plans is that they avoid most annual compliance tests. The employer here matches employee contributions. And he/she males the annual contributions on behalf of the employees. The payments made by the employer are vested immediately.
Which of these interests you?
There are many options and products, which you can use to provide your workers with good benefits packages. On one side you have the broad selection and on the other your company’s unique needs. Let’s take a closer look at your individual circumstances and put together a tailor made plan based on your needs and budget. You can get in touch with us using the form below. We will make sure that one of our experts will get back to you within 24 hours.