Are Your Employees Bragging About Their Retirement Benefits?

Are Your Employees Bragging About Their Retirement Benefits?

Many employers think that cash is king when it comes to employee compensation; however, with increasing healthcare costs and uncertainty over the future of social security income, employees are placing a bigger emphasis on employer-provided benefits. While many companies focus on providing competitive healthcare options to their employees, the company retirement plan is often overlooked once it has been established.

Recent studies have shown that employees are increasingly concerned about having enough income during retirement. According to the Towers Watson 2013/2014 Global Benefits Attitude Study, 62% of employees would give up some pay for a guaranteed retirement benefit and more than half of employees would sacrifice pay for a more generous retirement benefit. Employer-sponsored retirement plans (typically 401k plans) are the primary savings vehicle for many employees which means they can be a valuable recruiting and retention tool.

It all starts with the design of a 401(k) plan. Setting up the plan-specific options such as employer contributions, vesting schedules, employee eligibility and distribution options play a big part in how competitive your plan will be. Optimizing the plan design helps employers achieve specific goals such as:

  • Maximizing contributions for key employees or owners
  • Incentivizing employees to save more for retirement
  • Retaining employees
  • Providing tax deductions for the company

It is extremely important to weigh the pros and cons of the various design options to ensure that the overall plan is on par with competitors.

In order to navigate the complexities of the plan design options available to their plan, employers should work with specialized experts that understand how the various alternatives will affect the company. Daily plan operations, tax implications and the effect on the employer contribution are some of the key areas to consider. Partnering with a strong Third Party Administrator (TPA) or an Investment Advisor that has developed expertise in working with retirement plans can go a long way toward re-designing your plan to attract and retain top talent while maximizing tax benefits for the company.

For more information on the importance of a retirement service provider, download our ebook, “The Value of a Retirement Plan Advisor.”



McLean Asset Management Corporation (MAMC) is a SEC registered investment adviser. The content of this publication reflects the views of McLean Asset Management Corporation (MAMC) and sources deemed by MAMC to be reliable. There are many different interpretations of investment statistics and many different ideas about how to best use them. Past performance is not indicative of future performance. The information provided is for educational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy or sell securities. There are no warranties, expressed or implied, as to accuracy, completeness, or results obtained from any information on this presentation. Indexes are not available for direct investment. All investments involve risk.

The information throughout this presentation, whether stock quotes, charts, articles, or any other statements regarding market or other financial information, is obtained from sources which we, and our suppliers believe to be reliable, but we do not warrant or guarantee the timeliness or accuracy of this information. Neither our information providers nor we shall be liable for any errors or inaccuracies, regardless of cause, or the lack of timeliness of, or for any delay or interruption in the transmission there of to the user. MAMC only transacts business in states where it is properly registered, or excluded or exempted from registration requirements. It does not provide tax, legal, or accounting advice. The information contained in this presentation does not take into account your particular investment objectives, financial situation, or needs, and you should, in considering this material, discuss your individual circumstances with professionals in those areas before making any decisions.