In today’s tight labor market, businesses must distinguish themselves from direct and indirect competitors. One way to do this is by offering a competitive benefits package that your ideal types of employees are seeking. 

As a business owner in Danvers, MA, offering a comprehensive benefits package with a customized corporate retirement plan can significantly draw high-caliber employees to your firm and create a loyal, motivated team of productive employees. 

We’ve created this guide as a reference tool for those considering establishing an employee benefits program or updating or improving an existing plan. We will also discuss the many tax advantages a business owner can reap. 

The Value of Offering a Comprehensive Compensation Package to Your Employees

Establishing a comprehensive retirement benefits plan is a cornerstone for long-term success if you plan to grow. A thoughtfully designed employee benefits package isn’t just a perk; it’s an investment in your company’s future. Following are some of the long-term advantages:

1. Improved Employee Retention: A competitive retirement plan encourages employees to stay longer, saving businesses the high cost and time associated with frequent recruitment, training, and onboarding.
2. Boosted Productivity and Morale: Knowing they have a financially secure future motivates employees to perform well and feel more connected to the company’s success.
3. Enhanced Business Reputation: Businesses with strong benefits packages are often viewed as more reputable and reliable, attracting new employees, partners, and investors.
4. Scalability and Future-Proofing: A solid benefits structure can grow with the company. As you add new team members, the package can adjust and scale accordingly, offering a stable and appealing workplace for many years.

Sherr Financial Associates (SFA) specializes in designing employee benefits packages that grow with your business and help long-term stability and employee satisfaction.

Tax-Efficient Strategies for Employers

While offering competitive employee benefits might seem expensive, there are tax-efficient strategies that can help you manage these expenses. As an employer, you can leverage various tax-efficient strategies when creating an employee benefits package, helping reduce costs while providing valuable perks to employees. 

Consider the following five strategies for your business:

• Employer Contributions to Retirement Plans: Contributions to your employee retirement plans, such as 401(k) plans, are generally tax-deductible as a business expense. This benefits employees’ retirement savings and reduces your company’s taxable income. Tax savings help pay for part of the benefit.
• Health Savings Accounts (HSAs) Contributions: If you offer a high-deductible health plan, contributing to employees’ HSAs can be a tax-efficient benefit. Your employer contributions are tax-deductible, and funds in employees’ HSAs grow tax-free, creating a cost-effective benefit for employees while saving on payroll taxes.
• Flexible Spending Accounts (FSAs) and Dependent Care Accounts: You might consider offering FSAs and dependent care FSAs, allowing your employees to set aside pre-tax income for qualified expenses. Although you may incur some administrative costs, these accounts lower payroll taxes and provide a helpful benefit that appeals to employees with healthcare and dependent care expenses.
• Group Life and Disability Insurance: Employer premiums on group life and disability insurance policies are tax-deductible, offering a cost-effective benefit. The first $50,000 of group term life insurance coverage is also typically exempt from payroll taxes, adding another layer of tax-efficient benefit.
• Employee Stock Ownership Plans (ESOPs): ESOPs allow your employees to invest in the company, creating an ownership culture while providing you with tax benefits. Contributions to ESOPs are tax-deductible, and ESOPs offer additional tax advantages, like potential deferral of capital gains taxes for C corporations.

Working with an experienced Danvers, MA financial advisor who specializes in employee benefits planning can help you understand and navigate these options, so you make the right decisions for your employees and company. 

Navigating Compliance and Regulatory Requirements

Ensuring your benefits comply with current employer/employee laws is important if you want to offer an employee benefits package. Because retirement and other benefits plans are subject to strict regulatory oversight, failure to adhere to legal requirements can lead to significant penalties and legal repercussions. This is where working with advisors who understand the applicable regulations is crucial.

For example, regulations such as the Employee Retirement Income Security Act (ERISA) and guidelines from the IRS and Department of Labor create the standards for employee benefits. Ensuring compliance with these regulations requires knowledge of plan design, fiduciary responsibilities, and administrative procedures. 

That’s why so many business owners in Danvers, MA, outsource the oversight of these plans to firms like Sherr Financial Associates (SFA). This allows you to spend time doing what you do best: managing and growing your business. 

Steps to Create and Offer an Employee Benefits Package

Creating a benefits package that resonates with your employees and aligns with your business goals doesn’t have to be overwhelming. Following is a step-by-step guide to help get you started in the right direction:

• Determine what benefits will be most valuable to your employees and feasible for your business. Conduct surveys or open discussions to gauge employee interest in various benefit options, such as health, retirement, and wellness programs.
• Decide on a budget for the benefits package and identify tax-efficient options to help you provide meaningful benefits without overspending. Consulting with a local expert in Danvers, MA, can provide insights into options that maximize employee benefits while reducing company tax burdens.
• Work with an advisor to customize a retirement plan that aligns with your business structure. This can include deciding on contribution types (e.g., employer-matched 401(k) plans, profit-sharing) and contribution limits that are fair, competitive, and sustainable.
• Familiarize yourself with relevant regulations and work with compliance experts to establish a legally sound plan. Regular reviews with your advisor ensure the plan remains compliant and up-to-date with new regulations.
• Communicate the benefits to your employees, outlining the advantages of each service. Hold informational sessions and provide resources to help employees maximize their use of the benefits.
• As your business grows, so should your benefits package. Periodically review and adjust the plan to reflect any changes caused by growth, budgetary constraints, or your employees’ basic needs.

Partner with Sherr Financial Associates (SFA) for Employee Benefit Planning in Danvers, MA

Offering a well-rounded employee benefits package demonstrates your commitment to your employees’ well-being and can substantially impact your business’s success. A tailored retirement plan is more than a benefit; it’s a strategic asset that fosters loyalty, enhances productivity, and positions your company as a desirable employer.

Connect with us to learn more about our corporate benefit plan expertise.

This material is intended for informational/educational purposes only and should not be construed as investment advice, a solicitation, or a recommendation to buy or sell any security or investment product. Please contact your financial professional for more information specific to your situation.