Offering a retirement plan is a powerful way to attract and retain top talent while demonstrating a commitment to employee well-being. 

By providing this benefit, businesses can ensure prospective and existing team members have financial security in their later years. 

In this piece, we break down the process of implementing a retirement plan into six practical steps. Then, we outline some established providers you can refer to when creating your own plan.

1. Understand the Benefits of Offering a Retirement Plan

• Employee Attraction and Retention: Retirement plans are a sought-after benefit that can differentiate your business from competitors when hiring.
• Tax Advantages: Employers can receive tax deductions for contributions made to employee retirement accounts.
• Improved Employee Satisfaction: Financial security can lead to higher morale and productivity.
• Compliance with State Mandates: In some regions, businesses are required to provide access to retirement savings plans.

2. Choose the Right Type of Retirement Plan

• 401(k) Plan: Allows employees to contribute pre-tax earnings, often with optional employer matching.
• Simplified Employee Pension (SEP) IRA: Ideal for small businesses; only employers contribute, with minimal paperwork.
• Savings Incentive Match Plan for Employees (SIMPLE) IRA: A good option for businesses with 100 or fewer employees, featuring mandatory employer contributions.
• Traditional or Roth IRA: Useful for businesses that want to facilitate individual savings without contributing themselves.
• State-Sponsored Plans: If available, these are easy-to-implement options for small businesses.

3. Evaluate Costs and Administration

• Initial Setup Costs: Factor in any administrative fees associated with establishing the plan.
• Ongoing Contributions: Decide on employer contribution levels, such as matching a percentage of employee contributions or offering a flat amount.
• Administrative Expenses: Some plans have lower administrative costs, so it pays to shop around for the best value for your business.

4. Partner with a Financial Institution or Third-Party Administrator

• Research Providers: Look for a reputable company to manage your retirement plan, ensuring it meets compliance requirements.
• Seek Guidance: A financial consultant can help tailor a plan that aligns with your company's size, budget, and goals.
• Consider Automation: Many providers offer digital tools that simplify payroll deductions and plan management.

5. Develop a Clear Policy and Communicate the Plan

• Eligibility Criteria: Define who qualifies for the plan, such as full-time employees after a certain probation period.
• Contribution Limits: Communicate the maximum amounts employees can contribute annually.
• Matching Details: Clearly outline any employer matching programs and vesting schedules.
• Regular Updates: Host informational sessions and distribute materials to ensure employees understand their options.

6. Monitor and Adjust the Plan

• Employee Feedback: Regularly solicit input to ensure the plan meets employee needs.
• Regulatory Compliance: Stay informed about changes in laws affecting retirement plans.
• Adapt as Needed: As your business grows, consider upgrading or expanding your retirement offerings.

Plan Providers for Consideration

Here are some established retirement plan providers for businesses you may wish to consider:

Charles Schwab: Schwab offers both individual and small business retirement plan options, emphasizing low fees and a robust support network.

Vanguard: Known for its low-cost retirement solutions and strong investment tools, Vanguard offers a variety of 401(k) and other retirement plan services for businesses of all sizes. You can explore their options here.​

Fidelity Investments: Fidelity provides comprehensive retirement planning services, including tools for employee engagement and plan management. 

Principal Financial Group: Principal specializes in customizable retirement plans for small to large businesses, including 401(k)s and other defined contribution plans. 

TIAA: Ideal for nonprofit and educational organizations, TIAA provides tailored retirement plans and investment services.

By following these steps, your business can implement a retirement plan that supports employee financial wellness and aligns with company goals. A well-executed plan not only enhances the lives of your team members but also strengthens your organization's foundation for long-term success.