Best Retirement Plans

Setting Up an Employee Pension Account is Easy


An employee pension account is a simple retirement plan that allows an employer to make contributions for their own retirement or their employees' retirement without getting overwhelmed by other more complicated plans. The account is a simpler and less expensive option for the self-employed and small businesses. For the self-employed, the contributions are based on the net profit of the business. The employer can contribute to their employee's funds, usually by up to 25% of the employee's wages. However, if the employee leaves the company, he or she may keep all of the retirement contributions as of that date.


The employer can establish less restraining requirements than the standard federal regulations if necessary. These eligibility requirements state that for an employee contribute to the pension account, they must be at least 21 years, have worked with the company for at least three of the last five years and have received at least $450 in compensation for the tax year. Withdrawals should begin by the time the employee is 70  1/2 . There are no contribution obligations set on employee pension account. It is not compulsory for an employer to maintain a certain level or frequency of contributions to the plan. This means employees have the flexible ability to alter the contributions made each year based on the profits of the business for the given year. Make sure to have a good 401k safe harbor match.


It is relatively easy to enroll in an employee retirement pension account. All it takes is filling out a two page application form. The employee must complete an investment application supplied by the company who will hold the funds. In most cases, the account does not require annual returns to be filed with the national tax authority.


Employee pension retirement account contributions are made by the employer by the date that the company's tax return is due. This means that the contributions are deductible for that tax year. For the self-employed, there are few administration costs to be catered for. If employees are involved, they must receive the same benefits of the account plan. The funds in the plan can be invested similarly to other retirement accounts. Read about the erisa section 3 38 ideas at our site.


You can easily set up an employee retirement account with very few administrative tasks. In fact, the account will only require a couple of hours per year for paperwork. You can easily set up deductions each pay period.


An employee retirement account plan is an easy way to start a retirement savings plan with a minimal amount of work. It is also an excellent benefit you can give your employees, especially if you offer a corporate match. Read more factual information on these at