How Do You Set Up A 401(K)?
• Have a clear understanding for why you want to establish a 401(k). For example, some companies want to attract or retain good employees, while others want to ensure there is a succession plan in place for the older workforce. • Define the needs of your organization and its employees as it relates to retirement benefits. Conduct a simple survey to determine potential plan participation. • Determine whether the company is planning to match contributions or not. • Create a census with critical employee information such as full name, employment status (part-time or full-time), hourly wage or salary, level of employment (entry level, management, etc.), and the date of hire. • Determine a vesting schedule for when employees can participate. Choose a 401(k) advisor well. Do your due diligences by interviewing and receiving a proposal from at least 3 different 401(k) providers. And, ask lots of questions.
