Advantages of Establishing Qualified Plans

Why Should I Choose a Qualified Plan for my Business? What’s in it for me? – Guy Linscott, owner of a packaged foods store in Adrian, Georgia

Choosing the right retirement plan is not just important for your employees but also for your business. After all, the plan needs to match the needs of your business and keep within its limitations. At the same time, it should also offer some attractive benefits to employees so that they will voluntarily participate in it. Voluntary participation makes it far easier to manage the employee benefit plan.

A qualified plan like the 401K brings some special advantages to employees, but employers stand to gain by establishing such plans too. The most attractive benefit you get from establishing a qualified plan for your employees is the tax benefit. When you make contributions to the employee’s 401K account, you can claim tax deductions on them. By offering the best possible employer contribution matches, you can attract really skilled employees to your business. These employer contributions also help retain employees and build loyalty to among your staff.

The cost of setting up and managing such plans has considerably reduced in recent times, thanks to cost effective DIY 401 suites like You may be able to claim tax credit for some portion of the set up costs incurred when you establish a qualified plan and cut costs even further. In fact, you can claim such credits over the initial three years of the plan. It may also be possible for you to claim start up cost tax credit in the year before the financial year in which the plan becomes operational.

About Elliot Earl, Director, Pension Trade Association
Director, Pension Trade Association Founded in 1982, the Pension Trade Association [California Domestic Nonprofit Corporation #C1629080] is dedicated to helping workers save for their retirement through expanded coverage of 401k -type defined contribution pension plans.

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