Help your employees plan for a more secure future. Here’s how.
1 LOW COST
Retirement plans can be expensive for small businesses. By forming a larger group, we employ the benefit of economies of scale, or “strength in numbers.” In other words, you and your employees will enjoy the same high-quality options at new lower costs, comparable to much larger company plans.
Administrative burdens are lifted. SCRS helps reduce time, effort and fiduciary liability associated with managing a 401(k), allowing the employer to focus on running the business.
You tell us your objectives and a SCRS 401(k) can be customized to your needs. Consider:
- Is an employee match important to retaining your best talent?
- Do you want employees to be eligible immediately or after a few months?
- Do your younger employees need a Roth option?
- Should your employees be able to borrow against their balance with a 401(k) loan?
Not all plans in an Association Retirement Plan group are exactly the same. You can establish your own guidelines best suited for yourself and your employees.
4 EASY TO IMPLEMENT
Making a benefits change (or offering them for the first time) can be overwhelming - and shouldn't disrupt your business. The SCRS has taken steps to reduce your stress.
Participants enjoy the benefit of automated, online enrollment, paperless transactions and selection from among several portfolios, along with enrollment and education support. Specialists will walk you through the process and help make you feel comfortable.
Retirement Plan Details
- Member businesses considering starting a new 401(k) plan.
- Member businesses considering the SCRS 401(k) as an alternative to their current 401(k) plan.
- Helps employees save for retirement
- Allows employers to set up a matching contribution
- Tax saving for employer
- Teaming with other members results in reduced 401(k) expenses
- Reduced fiduciary liability
Up to $25,000 pretax if age 50 or older
WHY SHOULD I OFFER A 401(K) PLAN TO MY EMPLOYEES?
The obvious answer to this question is that offering a 401(k) plan will allow you and your employees a better vehicle to save for retirement. But there are a few other advantages worth mentioning:
- Attract the right people. More than half of small business owners say offering a plan helps attract better quality employees. What’s more, one-quarter of small business owners say that establishing a 401(k) plan was the result of employee demand, and a similar percentage say departing employees frequently cite the lack of adequate retirement benefits as part of their reason for leaving! What it comes down to is this: when talented people are deciding between working for you or for someone else, having a retirement plan available could be the deciding factor.
- Save money, tax free. One of the best parts of having a retirement plan is that all of the money you and your employees save and earn on investments is tax free until retirement. But that’s not the only benefit. The best bonus might just be for the business owner. Owners can get a tax deduction for making contributions to their employee’s retirement accounts. The higher the amount, the higher the tax savings. In other words, you can compensate employees through retirement contributions all while taking a sizable tax deduction. Not only that, but if you have more than one employee you will also qualify for a $500 tax credit on the first three years of your business. That’s $1500 that can help you with startup costs.
WHAT IS AN ASSOCIATION RETIREMENT PLAN, OR MEP 401(k)?
A MEP or “Multiple Employer Plan” is a 401(k) plan established under 413(c) of the Internal Revenue Code that allows employers who are unaffiliated with each other to adopt into a retirement plan sponsored by a third party that is responsible for administering the plan. In our case, TPC 401(k) is the Plan Sponsor & Trustee, and our clients are the adopting employers. For SCRS, Decisely is the platform, TPC is the plan sponsor and trustee, and Virginia Asset Management is the independent investment advisor.
HOW IS THE SCRS MEP DIFFERENT FROM A TRADITIONAL 401(K)?
Overall, you’ll find the MEP to be more cost-effective than a traditional 401(k) plan. For one thing, you won’t have to handle the administrative costs associated with managing your own plan. Secondly, we choose from investment funds that generally have lower fees. And lastly, the MEP allows you to take advantage of the economies of scale for lower pricing than with an individual plan. In other words, it can be more cost effective to be part of a group rather than if you are on your own.
IS MY PLAN LIKE EVERYONE ELSE’S PLAN? CAN MY COMPANY’S PLAN DESIGN BE CUSTOMIZED WITHIN THE MEP?
Absolutely. Part of our process is to design a plan with your specific goals in mind. Each client completes their own adoption agreement. Members starting a new retirement plan are able to design a retirement plan, choosing from 25+ customizations including the choice of offering a match, employee eligibility timing and whether or not your want to offer loans. They also choose their own vesting schedule, company match, eligibility requirements and whether they would like to offer loans or a Roth option.
WHO IS BEST SUITED FOR A MEP 401(k)?
Any employer within the SCRS membership is eligible to participate in the MEP. The MEP is the right fit for companies that are looking to save money on administrative costs and to have relief from fiduciary responsibility. The MEP is most appealing to small businesses because of the administrative cost savings.
I HAVE AN EXISTING 401(K) PLAN, HOW DO I KNOW IF IT WOULD BE LESS EXPENSIVE TO JOIN THE MEP 401(K)?
SCRS has hired an Investment Advisor to help administer the MEP 401(k). Part of this offering is to review your existing 401(k) plan and provide a cost analysis to our members. You will be provided a report that outlines your current expenses vs. the MEP at no cost or obligation.
HOW DO I GET STARTED ESTABLISHING A RETIREMENT ACCOUNT FOR MY EMPLOYEES?
We’ve been in this industry for a long time. We know that many 401(k) policies can be difficult to create. That’s where we make the difference. We offer streamlined and automated options for 401(k) plans with the goal to make this process easy and simple. We want you, the small business owner, to concentrate on what you’re good at: running your business. We understand that a retirement plan isn’t the only thing on your mind… but it IS the only thing on ours. We can walk you through the process step by step, ensuring all of your objectives are met. Click on the "Get Started" link, fill out the form and we will help you get started!