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Employers who do not “offer” a Retirement Plan will soon be dinosaurs, in fact, maybe becoming extinct

By March 30, 2022No Comments

ACSI has been providing updates about the New York State mandate which will require that most employers with NYS employees will either need to have their own Retirement Plan (e.g., a 401k Plan) or will have to provide access and automatic enrollment into a State-regulated IRA-based program (i.e., the New York State Secure Choice Savings Plan).  See our February update at https://acsi-ny.com/update-about-new-yorks-mandatory-retirement-plan-and-automatic-enrollment-requirements/.  The Secure Choice rules are being developed by the Board that is charged with doing so, and the mandate is months away – maybe longer – from “going live”.

There are many benefits for an employer to offer its own 401k Plan or other Retirement Plan, without being mandated to do so.  The “Great Resignation” has highlighted one such advantage: potentially improved employee retention rates.  For example, Gusto, a payroll and HR platform serving over 200,000 small and medium-sized businesses, recently surveyed its clients and reported:

Firms With Retirement Benefits are Less Likely to See Workers Quit:  Across both Personal Services and Professional Services, firms offering retirement benefits (401k or Individual Retirement Account (IRA)) have experienced a greater ability to retain talent.  In Personal Services, firms offering retirement benefits have experienced employee quit rates that are 25% lower than firms without such benefits, while monthly quit rates are 14% lower in Professional Services.  The returns of offering these benefits, in terms of reduced employee turnover, can far outweigh their low costs.”  (see https://gusto.com/company-news/a-real-time-look-at-the-great-renegotiation-the-benefits-of-employee-benefits) (emphasis (underlining) added)

If you want to discuss establishing a 401k Plan or other Retirement Plan, or brainstorm potential changes to improve an existing Plan, please contact mbrand@acsi-ny.com or check-out www.acsi-ny.com.

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