You would love to offer a generous retirement plan for your employees. But if you do not have your own Human Resources department, choosing and maintaining a pension fund management system can be costly, complicated and time-consuming. Below are some tips for simplifying the pension fund management system of your company.
Take a look at your available options. The IRS has a comprehensive guide to the many types of benefit plans open to small businesses. You can have an IRA-based plan or a Defined Contribution plan like 401(k). Generally, small businesses might be better off choosing an IRA plan, as it offers more flexibility in the contribution levels you will be expected to make to the pension fund management system of your employees.
Be aware of administrative errors. Filing the paperwork for retirement plans can be complicated, and any slip-up can leave you subject to IRS fines. When setting up your pension fund management system, look over the Fix-It Guides of the IRS for a list of the most common mistakes to ensure that you are not making any costly errors.
Use financial accounting software to track your fund. In most cases, you can track the fund growth of your company as well as the contributions using the same pension fund management system you might use to manage your sales and expenses. Look for some great software tools for tracking the finances of your company.
Stay on top of compliance issues. The Department of Labor has numerous laws that regulate how pension fund management systems can be used and funded. To ensure that you are following the letter of the law, visit the Small Business Retirement Savings Advisor o the Department for links to relevant publications and laws. Or, if this seems a little over your head, consider meeting with an employer lawyer to put everything in order.
Hire a retirement plan consultant. Whether you have already set up a pension fund management system or you are just starting to consider it, it might be helpful to get assistance from one specializing in the set up and maintenance of pension plans for small businesses. the consultant can help you point out the best fit based on your need, assist you through all the paperwork, and handle ongoing administrative tasks.