Meet Andrew, Plumber
As a small business owner, Andrew was never really sure whether his plumbing business was big enough to warrant offering a retirement plan to employees—until New Jersey passed a law requiring businesses with more than 25 employees offer one.
Andrew currently has 15 employees on his staff and already offers a 401(k), so as he continues to grow his customer base and by extension, his staff, he will be in compliance with the New Jersey Secure Choice state mandate. He knew he wanted to save more than $6,000 per year for his own retirement (the max contribution limit of the state-run IRA), so Andrew knew the New Jersey Secure Choice is not a viable solution for his goals anyway.
He also saved in a 401(k) plan through his previous employer, so he knew he wanted to roll his existing savings over into his new employer-sponsored plan. Andrew was looking to keep plan fees low while also taking advantage of tax deductions for the business, so he decided to go with a 401(k) service that offers transparent pricing, plan design flexibility, and ongoing support: the CoPilot Prime 401(k) plan.
Andrew selected a Safe Harbor plan option, designed to automatically satisfy specific IRS non-discrimination testing. With varying pay scales among his staff, this feature can help his employees build a larger nest egg and allow for a higher savings rate for himself. When looking into plan options, he learned that without Safe Harbor, there may be restrictions on the amount owners and top-tier employees can contribute to their 401(k). He also included automatic enrollment on the plan to encourage plan participation among his employees. He sees the benefit of a simplified enrollment process and likes the savings encouragement up front. Plus, his plan administrator starts the enrollment process for him by contacting his employees with instructions, important dates, and follows up with reminder emails.
Many small business owners can relate to Andrew’s goals, attitudes, and challenges when it comes to running his small business while also satisfying retirement state mandates.
Click the + below to learn more about Andrew’s small business:
To learn more about choosing the right plan for your small business and explore our CoPilot plan options, check out the Retirement Plans Flowchart tool.
Operating a group retirement plan can be a lot of work, and Andrew doesn’t have time in the day to adequately monitor plan performance and participant outcomes. That’s why CoPilot Prime is a great fit for him as a plan sponsor.; it was designed to help relieve some plan administration duties and reduce fiduciary risk, all while helping participants reach their retirement goals.
Andrew already has a member of his staff who manually processes the company payroll. If you choose not to integrate your 401(k) plan with your current payroll provider, there’s a standard process for payroll. Use this video as a tutorial to learn how to do it in five easy steps.
With many states offering auto-IRA programs, Andrew had to decide between an IRA and 401(k) for his business. Learn more about the key similarities and differences between common retirement savings options available, including 401(k), SIMPLE IRA, and SEP IRA.
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CoPilot recordkeeping services include Years of Retirement calculations and savings alerts. Services for CoPilot are provided by Plan Administrators, Inc. (PAi), an Ascensus company. The Years of Retirement resource is for illustrative purposes only and is not, in any way, a guarantee of future results. CoPilot Prime is a suite of services provided by Plan Administrators, Inc. and PAi Trust Company, Inc. (PAi), which are Ascensus companies. CoPilot recordkeeping services include Years of Retirement calculations and savings alerts and are provided by PAi. Investment fiduciary services for CoPilot Prime are provided by PAi Trust, which is an affiliated business entity to PAi under common control and ownership interest. Services for CoPilot Prime Pooled Employer Plan are provided by PAi Trust Company, Inc., an Ascensus company. 401(k) plans are: Not FDIC insured | Not bank guaranteed | May lose value CoPilot IRA is a retirement service and is not an independent entity. Services for CoPilot IRA, including Years of Retirement and savings alerts, are provided by and through PAi Trust Company, Inc., an Ascensus company. PAi Trust Company does not provide any tax, legal, or investment advice. Individual Retirement Accounts are: Not FDIC insured | Not bank guaranteed | May lose value |