Avoid State Mandated Penalties, Reduce Risk and Save Money
New proposed legislation for employee retirement plans would affect your company’s fiduciary risk and administrative responsibilities.
House Bill 5461, introduced by Democratic state Rep. Mike McFall, seeks to establish a state-facilitated retirement savings program. Workers whose employers don’t offer retirement benefits would automatically be enrolled into the program. Businesses that don’t comply could potentially incur state penalties.
Unlike 401(k) plans, state-facilitated IRAs are not eligible for up to $16,500 in SECURE 2 Act tax credits. Their contribution limits are not as high as 401(k)s. Many state programs also require the employer to do their own plan administration—filing, reporting, adjusting contributions limits, and more. This can be burdensome to smaller businesses that don’t have the time or staff to do complex plan management.
As a member of the Small Business Association of Michigan (SBAM) you can participate in our Pooled Employer Retirement Plan and avoid all of this!
Our program takes on the highest level of fiduciary liability and removes your responsibility and accountability for operational and investment oversight. In addition to removing the risk and hassle of administering a 40(k) plan, the SBAM Pooled Employer Retirement Plan has other advantages including:
- Start up plans may be eligible for up to $5,000 tax credit to cover the annual administrative fee (for 3 years).
- Additional $500 annual credit for three years when a business establishes a retirement plan with automatic enrollment.
- No initial set up fees.
Small businesses stand to benefit in multiple ways from offering the SBAM Pooled Employer Retirement Plan to their employees:
- Employee Financial Wellness
- Competitive Advantage in Recruitment
- Employee Retention
- Tax Advantages for Employers
- Enhanced Employer Brand
- Improved Employee Engagement and Productivity
- Regulatory Compliance
By supporting employee financial wellness, attracting top talent, enhancing employer brand, and potentially enjoying tax advantages, you can create a win-win situation for both you and your employees.
Visit www.sbam.org/retirement for additional resources and information. Contact Kellie Neirynck, Senior Director of Products and Services to learn more and receive a proposal for your small business.