There was a time when the majority of Americans could count on their employer for a reliable retirement plan. Even in the depths of the Great Depression, Workforce.com notes that just 3% of American workers saw pension and retirement plans discontinued, while company-sponsored plans increased by 15% during this same time period. Today, plans are on the decline. For those companies still offering good retirement plans, there are smart moves that can be made to protect those plans for the people that keep the business humming and provide profits that improve everyone's life.
Monitor and Maintain
The key to any good retirement plan is ease and cost effectiveness. With regular monitoring and maintenance, your company will have an easier time administering the plan for employees and can control the costs of providing a retirement option to employees easily. In order to achieve this first step, conduct frequent reviews of corporate goals, objectives, and employee needs to make sure that the retirement plans you offer your employees aligns with the expectations and hopes of your staff.
If you want to control costs, re-explore plan options on a regular basis. Look at your contribution levels as an employer and compare that with other factors such as employee turnover. Bankrate suggests checking plan offerings on a quarterly basis to ensure that the market has not adjusted portfolios in an undesirable way. Just a few months of neglect could result in significant damage to the value of retirement plans.
Develop Programs to Support the 3 Rs
In this case, it is not about the 3 R’s of education, but rather the 3 R’s of corporate success: recruitment, reward, and retention. Inform all of your employees, and potential employees, of the benefits the company offers. Carve out a communication budget, utilize social media and online materials, hold group meetings, and conduct one-on-one counseling with representatives from all sides.
Control the healthcare costs your company faces by providing educational health and wellness initiatives that encourage your employees to be proactive, rather than reactive, when it comes to their health. Increase their participation in health and wellness plans at every possible turn.
If necessary, rethink the way your company approaches pensions and retirement plans. If you are not providing enough benefit, you will probably see higher employee turnover, which in turn increases the cost of recruiting, hiring, and training new employees. Believe it or not, skimping a little bit on retirement plans can have a major impact on the 3 R's.
Don't Neglect Your Own Retirement
As a small-business owner, you might want to consider alternative options that support employee benefits without necessarily increasing the amount of money that is devoted directly to retirement plans. One option would be to consider a profit sharing solution that puts money into your employees' pockets. This money can be directed into private retirement plans that are controlled by employees and their financial advisors, removing the burden on the company of providing retirement, while still ensuring employees are looked after as they prepare for retirement.
Most importantly, do not forget about your own retirement. It is all too easy to get wrapped up in providing for your employees. Maximize the contributions you make for yourself and your spouse, and consider exploring plans that offer higher maximums to help you catch up if you have started saving late in your life. Contact Manhattan ridge Advisors today to start developing a plan for your employee’s retirement as well as your own.