New Retirement Plan Available for Small Business Employees
2024-01-14 – BE&O A&B
Many small businesses need help offering 401k plans to their employees, but a provision in the 2019 SECURE Act has made it easier for employees to pool their resources.
The Pool Employer Plan is a special type of 401k that small businesses can create with their employees to create retirement savings. Courtney Kincaid, the President and CEO of the Indiana CPA Society, says the new plan is a game changer.
The new plan makes it easier for employees in small organizations to pool participants together to create retirement accounts. Kincaid says the plan helps employees lower their risk when investing and is a safer option than other retirement plans.
As the employment rate shrinks and employers must work harder to compete for workers, Kincaid says the new plan also helps small business owners recruit and retain employers in a competitive workforce.
While the plan may not offer as many investing options as a traditional 401k, Kincaid says the Pooled Employer Plan (PEP) is less of a burden on providers, and organizations could qualify for a tax benefit when they create a plan for employees.
Kincaid encourages small business owners to contact a CPA for help starting a new retirement plan for their employees. “They can help connect you to a good resource.”