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How Can Small Businesses Set Up The Best Retirement Plan?

Our expert shares two key factors to consider when crafting the retirement plan for your small business.

By Brian Severin

Setting up a retirement plan may seem like a daunting task, but it doesn’t have to be expensive or complicated—and it can be a valuable factor in the long-term success of your company and a powerful incentive for your employees. Here are a couple of important things to think about when looking to build a plan to meet both the goals of your business and the retirement-saving needs of your employees.

Brian Severin is the senior executive vice president and chief marketing officer at Mutual of America Financial Group. He serves as a member of the company’s executive team and is responsible for overseeing all marketing, corporate communications and sales operations, including the development and implementation of new strategic initiatives, products and services. Severin has more than two decades of experience working with small businesses and small to mid-sized not-for-profits at Mutual of America.

Brian Severin

Select an Experienced Provider

Of the many factors that go into plan management, one of the most important is selecting a retirement plan services provider. Regulations don’t require plan fiduciaries to consider plan cost exclusively, and there are other things to think about in addition to fees and expenses, such as the scope and quality of the plan services, the benefits of those services to the plan sponsor and its employees, and the depth of experience of the service provider. Moreover, rules and regulations around retirement plans are constantly evolving, and it can be burdensome for an owner to keep up with all the changes to ensure the plan remains compliant.

Simply sticking with the same plan for years or using an online platform with the lowest cost to manage a retirement plan seems like an easy approach, but this may not provide the most suitable plan for your business and your goals. Learning more about the plan options available can make a real difference. For example, section 105 of the SECURE Act of 2019 amended the Internal Revenue Code to allow companies with less than 50 employees to receive a tax credit equal to 50% of administrative costs when they start a retirement plan. Congress is currently considering increasing that credit.


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Focus on Employee Recruitment and Retention

In this tight job market, in addition to offering competitive salaries, providing a robust benefits package to your employees is critical. Unfortunately, saving for retirement is not a top priority for many younger American workers. However, a well-designed retirement plan can help attract potential candidates while rewarding existing employees for their efforts. Some features might include investment funds that align with the values of a business, an employer match, a robust participant education program, or a profit-sharing component that enables employers to share a percentage of their company’s profits based on quarterly or annual earnings. If your company is doing well, you can share the companywide success with your employees by increasing the amount you contribute to your profit-sharing plan. Another option may be to choose a vesting schedule for retirement contributions based on your employees’ years with the company.

These are just two key factors you can consider to help make a retirement plan work well for your company. By partnering with an expert to design your plan, you can offer your employees the ability to save for retirement in a way that best meets their needs as well as your company’s current and long-term goals.

About the author: Brian Severin

Brian Severin is the senior executive vice president and chief marketing officer at Mutual of America Financial Group. He serves as a member of the company’s executive team and is responsible for overseeing all marketing, corporate communications, and sales operations, including the development and implementation of new strategic initiatives, products, and services. Severin has more than two decades of experience working with small businesses and small to mid-sized not-for-profits at Mutual of America. He is a graduate of Loyola Marymount University, where he earned a BS in Business. Prior to joining Mutual of America, Severin worked at The Boeing Company, where he successfully completed a one-year management training program.


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