YP Perspective - ABC Keystone

Attaining and Retaining Talent Using Your Retirement Plan with SECURE Act 2.0

by: CJ LaPorta, CRPS, AIF, Corporate Retirement Plan Advisor, Stonebridge Financial Group

In the last couple of years, almost every company has experienced or is currently struggling to attain and retain talent. Right now, across the United States, there is a labor shortage in which there are about two jobs available for every person looking. Even if you find talent, employees jump from company to company for better pay and benefits. Offering higher wages is a clear first step to finding and keeping talent, but it has limitations to maintaining profit margins attractive and bids competitive. Another solution to this problem is utilizing or starting your company’s retirement plan, especially with the passing of the SECURE Act 2.0.

Offering a retirement plan, such as a 401(k), Simple IRA, or cash balance plan, to your employees is often one of the critical benefits individuals look for in a job. Not only do retirement plans offer an excellent benefit for employees to save towards their retirement effectively, but they also offer many benefits to businesses and business owners. With our nation’s retirement crisis, congress recently passed SECURE ACT 2.0, which provides many enhancements to retirement plans to incentivize retirement savings. To name a few:

If you do not offer a retirement plan, the 3-year small business startup credit is 50 percent of administrative costs, up to an annual cap of $5,000. Section 102 changes the credit by increasing the startup credit from 50 percent to 100 percent for employers with up to 50 employees. For 51 to 100 employees, the applicable percentage is 100 percent in the first and second years, 75 percent in the third year, 50 percent in the fourth year, 25 percent in the fifth year – and no credit for tax years after that. This makes starting a retirement plan more affordable and offers another valuable benefit to employees.

In 2024, employers could match student loan payments with plan contributions, which can attract labor.

In 2025 part-timers would have to be enrolled in their employer’s 401(k) after two years instead of the current three, which can help retain labor.

There are many great options when configuring a retirement plan customizable to what your company is looking to accomplish for the benefit of the business and employees. For example, implementing a new plan or ensuring your current plan is properly designed, is a great additional tool to help your company attain and retain valuable talent.

Posted May 9, 2023