Retirement Benefits and What to Consider When Offering a Construction 401K Plan
Retirement benefits are one of the most treasured payments for all employees. A person will desire to get well prepared for the period that comes after retirement. There are several things that a person who makes a regular contribution to his or her retirement should understand. The first thing is that employees should know that the employer is responsible for ensuring that the monthly contribution is submitted to the retirement benefits plan provider.
The construction industry is impressive. It is known to be very rewarding. Contractors, for instance, receive vast amounts of income. Those employed by the contractors, however, may have irregular income. It is, therefore, essential that a retirement benefit plan for people working in this sector be developed. The benefits plan should accommodate the needs of the employees and those of the contractors. One popular retirement benefit plan is the 401(K) plan. As an employer in the construction industry, you may need to consider the following aspects.
The first thing to consider is the size of the employees’ deduction. It is suggested that the amount deducted for retirement benefit plan be at least five per-cent of the total income. The employer is then responsible for ensuring that the deductions are remitted in a timely manner to the provider of the plan. The payroll deductions of all your employees should be calculated, and the magnitude of the deductions determined. As an employer, you may need to consider the process of remitting the payments and the proof for the transactions. It is essential to keep your records correctly. The records for each employee should be kept separately to ensure that there is no unnecessary confusion.
The second thing to consider is employee eligibility for the plan. There are several eligibility criteria that your employee should meet. Those participating in this plan should ensure that they have satisfied the eligibility criteria. An Employer should only allow eligible employees to participate in this plan. Issues on compliance may arise when the employer allows non-eligible employees to participate in the construction 401K plan.
Auditing is another aspect that employers should consider. Ideally, the size of your firm and the number of your employees will determine how regular you are supposed to do some auditing. It is required that Auditing on the deductions, remitted payments, and the size of contribution be done for reasonably large construction firms. The qualification of the auditing firm should not be questionable.
The other thing to check is the possibility of mistakes in the construction 401k plan. Due to the sophisticated nature of the transactions in the construction industry, it is necessary always to proofread your payment documents to ensure that there are no substantial errors. Interestingly, when you work with a reliable provider of the 401K plan, you will be in a position to make corrections without any difficulty.
The other thing to check is the presence of hidden expenses. The desire is that you save more money both for you and your employees. However, some providers of the retirement benefit plan have hidden fees. The hidden cost may eat up into your savings. It is appropriate to ensure that there are no hidden fees charged.