document.write('<p><b><font class="heading">Retirement Plan Options For Small Businesses</font></b></p><p><font class="text">According to The Pension &amp; Welfare Benefits Administr');
document.write('ation, small businesses employ nearly 40% of the private-sector workforce in the United States. However, a majority of s');
document.write('mall businesses do not offer their workers retirement savings benefits.</p><p>If you’re like many other small business');
document.write(' owners in the United States, you may be considering the various retirement plan options available for your company. Emp');
document.write('loyer-sponsored retirement plans have become a key component for retirement savings. They are also an increasingly impor');
document.write('tant tool for attracting and retaining the high-quality employees you need to compete in today’s competitive environment');
document.write('.</p><p>Besides helping employees save for the future, however, instituting a retirement plan can provide you, as the ');
document.write('employer, with benefits that enable you to make the most of your business’s assets. Such benefits include:</p><ul><li>');
document.write('<p>Tax-deferred growth on earnings within the plan</p></li><li><p>Current tax savings on individual contributions to t');
document.write('he plan</p></li><li><p>Immediate tax deductions for employer contributions</p></li><li><p>Easy to establish and main');
document.write('tain</p></li><li><p>Low-cost benefit with a highly-perceived value by your employees</p></li></ul><p>&nbsp;<br><b>Ty');
document.write('pes of Plans</b></p><p>Most private sector retirement plans are either defined benefit plans or defined contribution p');
document.write('lans. Defined benefit plans are designed to provide a desired retirement benefit for each participant. This type of plan');
document.write(' can allow for a rapid accumulation of assets over a short period of time. The required contribution is actuarially dete');
document.write('rmined each year, based on factors such as age, years of employment, the desired retirement benefit, and the value of pl');
document.write('an assets. Contributions are generally required each year and can vary widely.</p><p>A defined contribution plan, on t');
document.write('he other hand, does not promise a specific amount of benefit at retirement. In these plans, employees or their employer ');
document.write('(or both) contribute to employees’ individual accounts under the plan, sometimes at a set rate (such as 5 percent of sal');
document.write('ary annually). A 401(k) plan is one type of defined contribution plan. Other types of defined contribution plans include');
document.write(' profit-sharing plans, money purchase plans, and employee stock ownership plans.</p><p>Small businesses may choose to ');
document.write('offer a defined benefit plan or any of these defined contribution plans. Many financial institutions and pension practit');
document.write('ioners make available both defined benefit and defined contribution “prototype” plans that have been pre approved by the');
document.write(' IRS. When such a plan meets the requirements of the tax code it is said to be <i>qualified</i> and will receive four si');
document.write('gnificant tax benefits.</p><ol><li><p>The income generated by the plan assets is not subject to income tax, because th');
document.write('e income is earned and managed within the framework of a tax-exempt trust.</p></li><li><p>An employer is entitled to a');
document.write(' current tax deduction for contributions to the plan.</p></li><li><p>The plan participants (the employees or their ben');
document.write('eficiaries) do not have to pay income tax on the amounts contributed on their behalf until the year the funds are distri');
document.write('buted to them by the employer.</p></li><li><p>Under the right circumstances, beneficiaries of qualified plan distribut');
document.write('ors are afforded special tax treatment.</p></li></ol><p>&nbsp;<br>It is necessary to note that all retirement plans ha');
document.write('ve important tax, business and other implications for employers and employees. Therefore, you should discuss any retirem');
document.write('ent savings plan that you consider implementing with your accountant or other financial advisor.</p><p>&nbsp;<br>Here’');
document.write('s a brief look at some plans that can help you and your employees save.</p><p><b>SIMPLE: Savings Incentive Match Plans');
document.write(' for Employees of Small Employers</b></p><p>A SIMPLE plan allows employees to contribute a percentage of their salary ');
document.write('each paycheck and to have their employer match their contribution. Under SIMPLE plans, employees can set aside up to $10,');
document.write('000 each year by payroll deduction. If the employee is 50 or older then they may contribute an additional $2,500. Employ');
document.write('ers can either match employee contributions dollar for dollar – up to 3 percent of an employees wage – or make a fixed c');
document.write('ontribution of 2 percent of pay for all eligible employees instead of a matching contribution.</p><p>SIMPLE plans are ');
document.write('easy to set up – you fill out a short form, administrative costs are low, and much of the paperwork is done by the finan');
document.write('cial institution that handles the SIMPLE plan accounts. Employers may choose either to permit employees to select the IR');
document.write('A to which their contributions will be sent, or to send contributions for all employees to one financial institution. Em');
document.write('ployees are 100% vested in contributions, get to decide how and where the money will be invested, and keep their IRA acc');
document.write('ounts even when they change jobs.</p><p>&nbsp;<br><b>SEPs: Simplified Employee Pensions</b></p><p>A SEP allows emplo');
document.write('yers to set up a type of individual retirement account – known as a SEP-IRA – for themselves and their employees. Employ');
document.write('ers must contribute a uniform percentage of pay for each employee. Employer contributions are limited to the lesser of 2');
document.write('5 percent of an employee’s annual salary or $44,000. (Note: this amount is indexed for inflation and will vary). SEPs ca');
document.write('n be started by most employers, including those that are self-employed.</p><p>SEPs have low start-up and operating cos');
document.write('ts and can be established using a single quarter-page form. Businesses are not locked into making contributions every ye');
document.write('ar. You can decide how much to put into a SEP each year – offering you some flexibility when business conditions vary.</');
document.write('p><p>&nbsp;<br><b>401(k)Plans</b></p><p>401(k) plans have become a widely accepted savings vehicle for small busines');
document.write('ses. Today, an estimated 25 million American workers are enrolled in 401(k) plans that hold total assets of about $1 tri');
document.write('llion.</p><p>A 401(k) Plan allows employees to contribute a portion of their own incomes toward their retirement. The ');
document.write('employee contributions, not to exceed $15,000, reduce a participant\'s pay before income taxes, so that pre-tax dollars a');
document.write('re invested. If the employee is 50 or older then they may contribute another $5,000. Employers may offer to match a cert');
document.write('ain percentage of the employees\' contribution, increasing participation in the plan.</p><p>While more complex, 401(k) ');
document.write('plans offer higher contribution limits than SIMPLE plans and IRAs, allowing employees to accumulate greater savings.</p>');
document.write('<p>&nbsp;<br><b>Profit-Sharing Plans</b></p><p>Employers also may make profit-sharing contributions to a plan that a');
document.write('re unrelated to any amounts an employee chooses to contribute. Profit-sharing Plans are well suited for businesses with ');
document.write('uncertain or fluctuating profits. In addition to the flexibility in deciding the amounts of the contributions, a Profit-');
document.write('Sharing Plan can include options such as service requirements, vesting schedules and plan loans that are not available u');
document.write('nder SEPs.</p><p>Contributions may range from 0% to 25% of eligible employees\' compensation, to a maximum of $44,000 p');
document.write('er employee. The contribution in any one year cannot exceed 25% of the total compensation of the employees participating');
document.write(' in the plan. Contributions need not be the same percentage for all employees. Key employees may actually get as much as');
document.write(' 25%, while others may get as little as 3%. A plan may combine these profit-sharing contributions with 401(k) contributi');
document.write('ons (and matching contributions).</p><p>&nbsp;<br><b>Your Goals for a Retirement Plan</b></p><p>Business owners set ');
document.write('up retirement plans for different reasons. Why are you considering one? Do you want to:</p><ul><li><p>Take advantage o');
document.write('f the tax breaks, to save more money than you’d otherwise be able to?</p></li><li><p>Provide competitive benefits in a');
document.write('ddition to – or in lieu of – high pay to employees?</p></li><li><p>Primarily save for your own retirement?</p></li></u');
document.write('l><p>You might say "all of the above." Small employers who want to set up retirement plans generally fall into one of ');
document.write('two groups. The first group includes those who want to set up a retirement plan primarily because they want to create a ');
document.write('tax-advantage savings vehicle for themselves and thus want to allocate the greatest possible part of the contribution to');
document.write(' the owners. The second group includes those who just want a low-cost, simple retirement plan for employees.</p><p>If ');
document.write('there were one plan that was most efficient in doing all these things, there wouldn’t be so many choices. That’s why it’');
document.write('s so important to know what your goal is. Each type of plan has different advantages and disadvantages, and you can’t re');
document.write('ally pick the best ones unless you know what your real purpose is in offering a plan. Once you have an idea of what your');
document.write(' motives are, you’re in a better position to weigh the alternatives and make the right pension choice.</p><p>If you do');
document.write(' decide that you want to offer a retirement plan, you are definitely going to need some professional advice and guidance');
document.write('. Pension rules are complex, and the tax aspects of retirement plans can also be confusing. Make sure you confer with yo');
document.write('ur accountant before deciding which plan is right for you and your employees.</p>');