Why 401(k) Plans? 401(k) plans can be a powerful tool in promoting financial security in retirement. They are a valuable option for businesses considering a retirement plan, providing benefits to employees and their employers. Employers start a 401(k) for a host of reasons:

A well-designed 401(k) plan can help attract and keep talented employees.
It allows participants to decide how much to contribute to their accounts on a before-tax basis.
Employers are entitled to a tax deduction for their contributions to employees’ accounts.
A 401(k) plan benefits a mix of rank-and-file employees and owner/managers.
The money contributed may grow through investments in stocks, mutual funds, money market funds, savings accounts, and other investment vehicles.
Contributions and earnings generally are not taxed by the Federal government or by most State governments until they are distributed.
A 401(k) plan may allow participants to take their benefits with them when they leave the company, easing administrative burdens.

A 401(k) Checklist

Have you determined which type of 401(k) plan best suits your business?
Have you decided whether to make contributions to the plan, and, if so, whether to make non-elective and/or matching contributions? (Remember, you may design your plan so that you may change your rate of contributions if necessary due to business conditions.)
Have you decided to hire a retirement plan professional to help with setting up and running the plan?
Have you adopted a written plan that includes the features you want to offer, such as whether participants will direct the investment of their accounts?
Have you notified eligible employees and provided them with information to help in their decision-making?
Have you arranged a trust fund for the plan assets or will you set up the plan solely with insurance contracts?
Have you developed a record keeping system?
Are you familiar with the fiduciary responsibilities?
Are you prepared to monitor the plan’s service providers?
Are you familiar with the reporting and disclosure requirements of a 401(k) plan?

Lawson-Hawks Insurance Associates has a number of professionals that can help your company with meeting the needs of your retirement plan. Whether you need direction in choosing the best type of plan for your company, want help with compliance or just need a review, call us.