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WHY OFFER A RETIREMENT SAVINGS PLAN?

Employer contributions can be deductible from the employer's income.

Money in programs can grow tax-free.

410(k)

A tax credit for small employers helps offset costs for setting up some types of plans.

Helps attract and retain qualified employees.

There are IRA-based plans that are easy to set up and maintain, with no annual filing requirement for the employer.

Retirement Plan Resources for Businesses

As an employer, you have an important role to play in helping Vermont's workforce save for retirement. Research indicates that eight of ten people offered a retirement plan at work will participate. With a steadily declining U.S. savings rate, there is concern that people are not putting money aside for retirement. Social Security cannot be expected to cover the financial needs of the growing number of retirees. Ultimately, it will be taxpayers who will bear the responsibility for seniors with insufficient savings.

Nationwide, 70% of businesses with fewer than 25 employees offer no formal retirement plans. Vermont's economy is driven by its small businesses, with 75% of the state's companies reporting nine or fewer employees. These businesses employ 21% of the state's workforce. Employers from the small business sector have the opportunity to make a major impact on the future economy of Vermont by helping ensure their employees have access to a retirement savings plan.

Offering such plans to your employees doesn't have to be expensive, confusing or time-consuming. To help facilitate the increased availability of retirement savings plans for Vermonters on the job, the State Treasurer's Office has grouped a number of resources here to help you.

 

Who Can You Work With to Select the Right Plan?

Vermont's Department of Banking, Insurance, Securities & Health Care Administration (BISHCA) helps Vermonters choose, work with, and report problems with the businesses it regulates. Here's a list of Vermont-domiciled businesses that can help you select a retirement savings plan right for your company. This list is updated regularly.

Consumer Tips for Selecting a Retirement Savings Plan Provider

The Office of the State Treasurer offers these suggestions for evaluating a potential provider of a retirement savings product.

Check the Background of Your Investment Professional

FINRA BrokerCheck is a free online tool to help investors check the professional background of current and former FINRA-registered securities firms and brokers. FINRA, the Financial Industry Regulatory Authority, is the world's leading private-sector provider of financial regulatory services.

Choosing a Retirement Solution for Your Small Business

This concise IRS publication includes a two-page chart that quickly summarizes key advantages to seven different retirement plans.

Starting a Payroll Deduction IRA Plan

This is one of the simplest retirement arrangements a business can provide. It is available to a business of any size, even to those who are self-employed.

SIMPLE IRA Plans for Small Businesses

A SIMPLE (Savings Incentive Match Plan for Employees of Small Employers) IRA is available to businesses with 100 or fewer employees and in which each employee has a reasonable expectation of earning at least $5,000 a year. In addition, a business cannot implement a SIMPLE IRA if it currently offers another retirement plan. Administrative costs are low, no annual financial reports must be filed, and you may be eligible for a tax credit.

SEP Retirement Plans for Small Businesses

Simplified Employee Pension plans do not have the start-up and operating costs of a conventional retirement plan and allow for a contribution of up to 25 percent of each employee's pay. SEP contributions are tax deductible and your business pays no taxes on the earnings on the investments.

401(k) Plans for Small Businesses

There are a variety of 401(k) plans you could offer as an employer. This IRS publication reviews the different types of plans and the employer's responsibilities as it relates to the ongoing management of the plan selected.

IRS Electronic Forms List

This link connects you to forms you may need to file with the Internal Revenue Service to set up your retirement plan. The information provided above on different IRA-based plans will list any needed forms.