Companies set up a 401(k) plan for their employees for many reasons. As a vehicle that can help supplement social security income for their employees’ retirement years, a 401(k) is an important recruiting and retention tool and an excellent alternative to a traditional, company-funded pension plan. Plus, it can be rewarding to know that you are offering this support to your hard working employees.
The company, as the plan sponsor, can incur significant expenses in establishing and maintaining a 401(k) plan. Initial set-up costs are followed by expenses for record keeping and plan administration, all on top of any employer and/or profit sharing match. If the company is lucky enough to be growing and reach 100 or more employees, an additional plan expense comes into play: an annual plan audit. For some plan sponsors this is where the cost of a 401(k) plan can become a burden.
There is a way to avoid paying for an annual 401(k) audit, or other benefit plan expenses for that matter. It is perfectly legal and actually demonstrates that the plan’s fiduciaries (company officials) are taking their duties seriously.
Want to learn more? Click here to find out how to avoid paying for an annual 401(k) audit.