Fears around cost and complexity often deter small businesses from offering a 401(k). But offering a plan is easier and more economical than ever thanks to technological advancements according to Ben Thomason, executive vice president of revenue at Vestwell.
401(k)s and other investment vehicles like SEP and Traditional IRAs (individual retirement accounts) enable workers to contribute to retirement savings on a tax-deferred basis. Thomason, whose company provides a digital platform financial advisers use to set up and administer clients’ 401(k) plans, said he favors 401(k)s over other investment vehicles based on their flexibility, the amount of contributions that can be made and tax-deferred, and the ability to incentivize workers to save for retirement. Unlike other worker benefits such as flex-time and fitness memberships, a 401(k) plan carries liability that is not to be taken lightly. By law, employers have a fiduciary responsibility to ensure the program is run appropriately, in the best interest of participating employees, he said.