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Why A H.E.L.P. Plan Is Better Than A 401K For Employers and Employees

Across Central Florida, employers of all sizes are looking for ways to foster employee engagement.

Engaged employees outperform less engaged competitors in virtually every way. They experience faster rates of growth, better employee retention, and higher earnings per share. The impact of employee engagement is key no matter what industry you are in or what size your company is. It is just that important!

The question is: How can companies foster a culture of engagement that drives results?

Making sure your employees are properly compensated for the value they create is one of the foundations of engagement. In some cases, however, cash compensation can be less valuable than the alternatives. This is true in the world of employee benefits, where your negotiating power is truly priceless.

Your enterprise has the power to support your employees in their life goals by helping them get better health insurance, save for retirement, and much more. A company might have only a few employees total, but can ink employee benefits agreements that well exceed what an individual can access alone.

That’s why, in the past, so many talented employees have flocked to enterprises that offer a 401(k) plan.

A 401(k) is a standard retirement plan that formerly represented the gold standard in employee benefits. The employers of yesteryear touted this as an investment in their employees. Employees, by and large, believed it.

Saving for retirement is just as important now as it was then, of course. But these days, the failings of a 401(k) plan are increasingly obvious. All too many people have had their 401(k) savings wiped out just before retiring through no fault of their own. Luckily, an alternative that employees can count on is finally here.

We call it the H.E.L.P. Plan, and it benefits employees and employers alike.

3 Big Problems With A Traditional 401(k) The H.E.L.P. Plan Solves For You

The H.E.L.P. Plan is designed to counteract all the major drawbacks of the traditional 401(k).

It allows you to convert existing 401(k) policies into a form designed to benefit your organization.

Working with thousands of business owners from coast to coast, including those in DeLand and the rest of Florida, we’ve heard the many complaints about the 401(k).

In particular, we set out to address these shortcomings that were brought to our attention again and again:

1. A Traditional 401(k) Program Is Too Expensive For Employers

Employee benefits are far from free, but a good employee benefits strategy saves money while delivering a unique level of value. For what it promises, the 401(k) exacts a heavy toll. On average, it takes about $3,000 to set up a 401(k) plan and around $10,000 per year to keep the plan active.

And that’s really only the beginning!

Most 401(k) plans will sweep thousands of dollars in advisor fees out of the company coffers each and every year. While 401(k) providers often advertise that their fees are tax-deductible, it’s vital to read the fine print. You will often find that, despite what you’ve been told, a substantial amount is not deductible at all.

2. Employees Shoulder Onerous Hidden Costs In A 401(k), Too

When they’re reviewing employee benefits, the sight of a 401(k) is attractive to many new hires. While it’s a fine idea to have retirement savings set aside, they do not realize exactly how much they pay for it over time. These hidden costs include things like operating and advisory expenses, transaction fees, and advisory fees.

If they knew, they might not be so excited about the “king” of employee benefits!

How much does it all add up to? Naturally, this depends on a variety of factors: The size of your enterprise, how many people are participating in the 401(k) program, and so on. Experts have estimated the total cost at up to 6.22% annually. As your retirement program grows, so does your overhead.

3. The 401(k) Includes A Heavy Regulatory Burden For Employers

Many business owners do not realize they will be required to pay for annual compliance testing for the life of their 401(k). The purpose of these tests is to ensure that the company 401(k) program benefits everyone in the organization and does not unfairly favor owners and senior executives – those who make more money.

This regulatory burden is designed directly by the Internal Revenue Service and can be extremely challenging to pass. All direct costs of testing are borne by the enterprise. In the event an organization fails the test, it will be required to raise the level of employer contributions or take other costly steps.

Only about 82% of personnel participate in a traditional 401(k), making it more likely to fail the IRS tests.

The H.E.L.P. Plan Is A Sea Change In Employee Benefits Everyone Can Be Happy About

The H.E.L.P. Plan represents a new era for retirement employee benefits.

Here are the advantages you just can’t get anywhere else:

1. Zero Long-Term Costs To The Employer

The purpose of employee benefits isn’t to dig you into a deeper hole every year: It’s to add unique value and position you as an employer of choice. The H.E.L.P. Plan does it with an approach to retirement savings that won’t add overhead to your business.

You only pay nominal one-time 401(k) conversion costs – required by the IRS to prevent a taxable event.

There are no costs to set up the plan from scratch. What’s more, 100% of contributions to the employee plan are tax-deductible. You’ll never have to worry about combing fine print for hidden fees. Simply, there are none.

2. No Hidden Costs To Your Employees

With the H.E.L.P. Plan, more of your employees’ hard-earned money can go to their employee benefits. They can see the difference at a glance because they’ll get proof directly from us. Every plan contributor receives a guaranteed projection of the plan’s after-free performance good for 30 years or even more.

3. Unlimited Implementation

Employers have all the power when it comes to the H.E.L.P. Plan. There are no regulatory tests to pay for or pass. No need to worry about intrusive oversight. Employers can choose how much to contribute for themselves and for each employee without any restrictions.

4. True Employee Loyalty

With a standard 401(k) program, employees can take their accumulated funds at any time and leave. With the H.E.L.P. Plan, you control the funds. Consider it the ultimate incentive for employees to stay with you for as long as you need them. You can use the fund and pass it on to employees on your own terms.

Times have changed, and employee benefits need to change with them. The 401(k) has had its day. Now, you can get started with a modern, efficient, and effective retirement savings plan at virtually no cost to you. Even if you already have a 401(k) plan in place, converting is fast and easy.

To find out more or get started with the H.E.L.P. Plan, contact us today.