How Business Owners Can Combat Worker Shortages and Administrative Burdens
Business owners everywhere have a lot on their plate from the unstable economy to worker and supply shortages, to administrative burdens related to operating retirement plans with ever-changing requirements. This blog post will share information about how to use retirement plans and Third Party Administrators to bring relief to the administrative load carried by Plan Sponsors.
It is no secret that there are worker shortages all around America in every industry. One of the ways to combat worker shortages is to offer a retirement plan. There is an increase in business owners implementing a retirement plan to hire employees or making their current plans more attractive to retain workers. Distinguishing your business through desirable benefits is one of the best ways to make your company stand out to prospective employees amongst the sea of “now hiring” signs. Perks like tax breaks, employer contributions, reduced taxable income, and compounding interest on investments will increase the likelihood of a prospective worker choosing your company over another. In return, as the employer, you can experience tax breaks too through any contributions you make toward your employee’s 401(k) plan, as well as tax breaks for simply establishing a new plan. Offering competitive benefits is one of the best ways to attract and retain top talent, while also experiencing savings yourself, both of which are crucial in this volatile economy.
If you choose to implement a retirement plan to attract workers, you will find that such plans come with a heavy fiduciary burden for the dedicated Plan Sponsor due to all the administrative requirements and risk of costly penalties. A great option for alleviating some of the fiduciary workloads is to hire a Third Party Administrator that will be the 3(16) or provide 3(16)-like services. Outsourcing 3(16) Fiduciary Services is an effective option to reduce some of the liability for sponsoring a retirement plan. It also allows you to turn your attention back to the daily needs of your business and spend less time completing administrative tasks. Additionally, it reduces the uncertainty of compliance when under an IRS or DOL audit and provides you with additional shared Fiduciary compliance to mitigate risk.
Along with serving as a 3(16) for your retirement plan, a good Third Party Administrator can be a partner with the employer and be part of the Human Resource team to help relieve the administrative burden that an employer has in the operation of a plan. A generic, pre-fab servicing team can result in services that are poorly integrated, which causes a complicated, clunky experience, putting more work on the plate of the Plan Sponsor. Instead, you can choose a TPA that has established itself as an industry leader, with a positive track record of working with local businesses and advisors, as well as national recordkeepers. This will result in seamless operations and industry experts that work together to lighten the administrative burden felt by Plan Sponsors.
If you are interested in pursuing any of these options for your company, RPCSI can help. We have a specialized team that can work with you to design the perfect retirement plan for your company so you can attract and retain employees. Once that plan is in place, we will serve as a valuable member of your servicing team whether just as the TPA or also as the 3(16). Contact us today to let us know how we can help you!