The 401K and Your Employer's Obligation

Upon implementing a 401K plan, an employer has several obligations. It is necessary to be aware of these responsibilities; otherwise, a company could be fined or subject to possible lawsuits.

Most employees look for some type of retirement plan when making a job decision. During new hire training, the majority of companies give the employee information concerning the 401K plan.

As an employer, your 401K plan should be in compliance with ERISA rules and complete any required federal and state filings. Furthermore, the manager of this 401K must be familiar with the plan's testing requirements, in accordance with ERISA, federal, and state laws.

It is important to provide your employees with a 401K plan education. Therefore, you should allow seminars with the plan's brokers, in order for employees to answer questions that pertain to the plan designs and retirement options. Also, employees need access to a website to update their investment options and contribution levels. You plan brokers must provide opportunities for personal appointments with 401K investment specialists.

Being a cheap employer can be dangerous. Employees need sufficient investment choices, in order to save for retirement. Also, make sure you follow the ERISA, federal, and state rules. Keep in mind, the 401K plan can be leveraged to get and keep good employees.