Need a quick refresher on the benefits that a good retirement plan can bring to your firm? Probably not, actually. Through your work with clients every day, you see those benefits in action all the time, from creating long-term financial stability to bolstering business recruitment efforts, and much more.
And since you pay close attention to the numbers, you also know the drawbacks – starting with the high costs and time burdens that come with administering many of these plans. As a result, many firms have felt stuck in recent years, looking for less expensive and time-consuming options (and not finding any) while maintaining the status quo with plans that seem outdated and poorly matched to their current needs.
Many others, particularly very small firms, don't even have formal retirement plans in place, for reasons uncovered in the AICPA's recent survey of member firms.
Firm leaders on why they don't offer retirement plans:
PEPs: Newer plan option, new opportunities
The same survey, however, uncovered some important hidden opportunities. For example, Pooled Employer Plans (PEP), created through the SECURE Act, allow unrelated businesses to pool assets together into a single, large 401(k) plan. Never heard of them? According to our survey, you're not alone. Among firms that already have a plan, 39% of respondents reported that they've never even heard of PEPs. For those without a plan today, 49% have never heard of PEPs.
Why are PEPs such a big deal? Because when different companies are able to pool their assets in a single plan, administrative requirements and costs are streamlined significantly. Especially for smaller firms, this has the potential to bring the benefits of larger, more traditional 401(k) plans within reach, including:
- Higher contribution limits than a SIMPLE IRA
- Stronger ability to attract and retain top talent by offering vesting and matching
- Ability to reduce taxable income and tax liability
- Ability to backdate a profit-sharing plan for the prior year, up to the firm's corporate tax deadline
The impact on plan participants' retirement planning can be significant, especially when compared with other plans. Salary deferrals and catch-up contributions, available in 401(k)s, help participants maximize their retirement savings in a way other plans don't allow:
Now available for member firms from the AICPA
Whether your firm has an existing plan and is seeking to make a change or is looking to start a new plan from scratch, the AICPA is making it easier than ever. Through the AICPA 401(k) Plans for Firms Member Benefit, firms can access either a PEP or standard 401(k) for $100/month. Both are flexible, customizable plans with options that include matching, vesting and loans. Both are supported by dedicated 401(k) service specialists. And both come with a six-month, money-back service satisfaction guarantee.
If you think this could be a good match for your firm's needs, check out
The right retirement plan can make all the difference for your people, and your firm. Whether you choose a PEP, a traditional 401(k), or some other plan, it's worth a few moments of your time to catch up on the latest options.
