Employee Benefits for Business Owners
For a business owner, employee benefits are more than an operating expense. Retirement plans, insurance, executive benefits, and related programs can affect recruitment, retention, owner retirement savings, cash flow, succession, and the value the business provides to the family.
The right structure depends on what the owner is trying to accomplish, the needs of the workforce, the company’s finances, and the administrative responsibilities the business is prepared to accept.
Why Employee Benefits Planning Is Important
A benefit program should be evaluated in the context of the business rather than selected from a generic menu. A plan that works for one company may be costly, ineffective, or unnecessarily burdensome for another.
For many owners, the company benefit structure also affects their personal retirement planning, tax questions, risk management, and eventual transition from the business.
What We Can Do for You
My background includes retirement-plan drafting, fiduciary consulting, investment-process work, business education, and personal wealth management. I help owners organize the business and personal questions involved, evaluate available alternatives, and coordinate with the administrators, attorneys, accountants, insurance professionals, and other specialists required for implementation.
Our emphasis is on:
- Connecting the benefit strategy with the owner’s business and personal objectives.
- Evaluating alternatives based on costs, administrative demands, employee needs, and the company’s stage of development.
- Considering how retirement-plan design may affect the owner, key employees, and the broader workforce.
- Establishing a clear process for investment selection, monitoring, documentation, and service-provider oversight where applicable.
- Revisiting the structure as the workforce, ownership, profitability, and succession plans change.
Before discussing alternatives, we begin with what the business owner wants the benefit program to accomplish and which limitations must be respected.
Areas that may be evaluated or coordinated include:
- 401(k) and profit-sharing plan design
- Safe harbor plan considerations
- Cash balance and pension-plan coordination
- Owner and key-employee retirement contributions
- Executive and nonqualified-benefit questions
- Retirement-plan investment menus
- Investment monitoring and documentation processes
- Employee education and plan participation
- Plan expenses and service-provider review
- Group life and disability coverage
- Key-person insurance considerations
- Buy-sell funding considerations
- Coordination with business succession and the owner’s personal financial plan
A well-designed benefit structure should support the business, provide meaningful value to employees, and fit within the owner’s broader financial plan.
Contact us today to discuss your company’s benefit and retirement-plan needs.
*The cost and availability of life insurance depend on factors such as age, health, and the type and amount of insurance purchased. Before implementing a strategy involving life insurance, it would be prudent to make sure that you are insurable by having the policy approved. As with most financial decisions, there are expenses associated with the purchase of life insurance. Policies commonly have mortality and expense charges. In addition, if a policy is surrendered prematurely, there may be surrender charges and income tax implications.
