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Ask An Expert: Retirement Plan Options for Businesses of All Sizes

Benefit offerings are becoming a vital tool for employers to attract and retain their workforce, with retirement plans acting as a core component. Both small and large businesses may be hesitant to offer or change a retirement plan because it can seem overwhelming or financially burdensome. However, cost isn’t the only criterion for business owners to keep in mind. Selecting the correct plan also means choosing the correct provider depending on what the business needs are and the amount of liability the business is willing to accept in plan administration.

Which plan is right for my business?

Each business is unique, and a customized plan design begins with goals for the desired plan makeup. Retirement plans fall into two main types: SIMPLE IRA Plan or Qualified Retirement Plan (also known as a 401(k) plan). Both offer the employee and employer savings, but vary in complexity. Typically, the cost to administer a SIMPLE IRA Plan is less than a full-fledged retirement plan. Key differences between the two plans include:

 

 

SIMPLE IRA Plan

Qualified Retirement Plan

Employee Count
  • 100 or fewer employees
  • No limit

Eligible Employee
  • Employees earning $5,000 in current year and any two prior years
  • Employer can determine reasonable eligibility criteria related to age, service and hours

2025 Contribution Limit
  • $16,500 annually + $3,500 if 50 or older
  • $23,500 annually + $7,500 if 50 or older
  • Increased catch-up available if ages 60-63

Testing/Tax Filing
  • None
  • Required
 

Administration 

Not all retirement plan providers offer full-service in-house plan administration to their clients. In fact, it's relatively rare. Plan administration can feel overwhelming to businesses as it means a designated representative (such as a HR manager, owner, or office manager) assumes the fiduciary responsibility, which can create significant liability concerns. This responsibility is partly overseen by the Internal Revenue Service (IRS) and Department of Labor (DOL), meaning businesses are responsible for compliance in an ever-changing legislative environment. For example, substantial changes created in 2022 through the Setting Every Community Up for Retirement Enhancement 2.0 Act of 2022 (Secure 2.0) has required and optional changes rolling out each year for new and existing plans which must be adopted and followed.

What options are there for plan administration?

Businesses that do not wish to take on fiduciary responsibility and liability of plan administration can work with a provider like Bravera Wealth. Bravera offers in-house plan administration, relieving clients of several common burdens, such as: 

  • Fiduciary Role when selecting and monitoring investment choices
  • Full participant services (such as one-on-one meetings for employees)
  • Compliance oversight including IRS forms and filings 
 

If you have any questions about a new or existing retirement plan, Retirement Plan Advisor Chelsey Tostenrud and the Bravera Wealth team offer complimentary plan reviews and advice to businesses of all sizes.

Chelsey has worked in the finance industry since 2011. She assists employers with the implementation and administration of retirement plans to ensure they benefit their employees.

She can be reached at 701-456-3340 or ctostenrud@bravera.bank.



Start planning for your future.

Questions about your retirement? Our advisors can help! Contact us at 877-483-6811 or online. 
 
 


Disclaimer
While we hope you find this content useful, it is only intended to serve as a starting point. Your next step is to speak with a qualified, licensed professional who can provide advice tailored to your individual circumstances. Nothing in this article, nor in any associated resources, should be construed as financial or legal advice. Furthermore, while we have made good faith efforts to ensure that the information presented was correct as of the date the content was prepared, we are unable to guarantee that it remains accurate today.
 
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