Retirement Plans Are Becoming Mandatory. Does Your Business Have a Good One in Place?

Illinois now requires employers with at least five employees to offer a retirement program of some kind. For businesses with 16 to 24 employees, the deadline for establishing a retirement plan is November 1, 2022. For businesses with 5 to 15 employees, the deadline is November 1, 2023.

Regardless of your business’s size, retirement benefits are crucial. Individuals of all ages are increasingly concerned about retirement and many fear the end of social security. Workers want competitive retirement plans with a high match rate. If you want your company to stay competitive during this unprecedented worker shortage, you need to make sure you offer attractive retirement benefits.

Retirement Benefits Increasingly Important to the Workforce

Employers must fully understand what workers are looking for in a job if they want to stand out from the competition. Studies show that health and retirement benefits are increasingly vital. With so many businesses struggling to hire and retain quality employees, the need for appealing employment benefits has never been higher. 

One recent study found that 60 percent of employees consider a desirable retirement plan a good reason to stay with a company. Just under 50 percent of those surveyed considered a desirable retirement plan a good reason to join a company. These numbers are almost double the survey results from a decade ago. In 2010, only 41 percent of respondents considered retirement benefits an important reason to stay with a company, and a measly quarter of respondents stated that retirement benefits were an important reason to join a company. Clearly, retirement benefits matter to employees now more than ever before.

Good Retirement Plans Attract Workers and Provide Tax Breaks for Businesses

The new legislation mandates retirement plans for all employers with at least five employees. If a business does not offer a qualified savings plan, the default option is the Illinois Secure Choice plan. However, this is the bare minimum requirement, and this option does not require employer contributions.

For businesses to be competitive and attract skilled workers, business owners must think beyond the bare minimum. Qualified benefit plans have many advantages for the employer and the employee. Employer contributions are tax-deductible, and businesses may receive tax credits and other incentives. Employees enjoy the peace of mind that comes with retirement planning, reduced income tax liability, and other advantages. 

There are also intangible benefits to offering desirable retirement benefits to employees. Businesses can not only use retirement plans to attract people to work for them, but also create a culture of care for their current staff. When employees feel taken care of, they are more likely to stay with a company. 

Call Us for Help

Workers want high-qualify retirement plans now more than ever, and with so many plans and brokers available, retirement plans are something that employers can set up relatively easily. For help meeting your business’s needs, contact the Naperville business law attorneys at the Gierach Law Firm. Call 630-756-1160 to schedule a consultation.

Sources:

Illinois State Treasurer

Willis Towers Watson

Forbes