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Total Team Solutions Blog

Oct 26 2015

401K Retirement Crisis

By: John Morlock

 

RETIREMENT SAVINGS CRISIS IN AMERICA

 

Today almost half of workers in the United States do not have access to a company sponsored retirement plan, such as a 401(k) plan.  This is a 25% increase from just 15 years ago.  The reason for this significant decrease?  Almost 60% of these workers without access to a company sponsored retirement plan worked for a company with fewer than 100 employees.  This trend is only expected to continue as more and more middle age workers are joining new college graduates in forsaking careers at big corporations and accepting positions with small businesses that do not offer employee benefits plans. 

So why don’t small businesses sponsor retirement plans?  For one thing, many of these companies, especially the startups run by millennials, do not believe that it is their responsibility to help their employees save for retirement.  Plus many of them have not started to focus on their own retirement yet.  However, the most important reason is the cost, complications and fiduciary risk associated with these plans.  First you have to hire a specialized ERISA attorney to draft the plan documents for you.  Then you need to pay advisors to perform the record keeping, manage the assets, complete annual testing and tax filings and maintain the plan documents in compliance with the constantly changing regulatory environment.  Lastly, if not managed properly, the company could be subject to costly fines, penalties and lawsuits.

Still, human resource studies have consistently shown that offering a company sponsored 401(k) plan provides a significant benefit in attracting and retaining employees.  This employee retention in turn reduces the cost of recruiting and training new hires. 

Total Team Solutions can solve this dilemma faced by so many small businesses through its company sponsored 401(k) plan that all of its payroll clients may adopt into.  The cost to adopt: FREE (versus thousands of dollars to create a new stand alone plan).  The cost for recordkeeping, asset management and annual plan compliance: FREE (again, versus thousands of dollars for a standalone plan).  And best of all, Total Team Solutions assumes almost all fiduciary responsibilities and risk associated with maintaining the plan, so the small business owner can sleep soundly at night.

To find out more about how the Total Team Solutions 401(k) plan can help you and your employees, contact John Morlock at 1-800-836-9678, ext. 5, or email him at jmorlock@ttspro.com.


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