Employees work hard every day to pursue their retirement dreams. Without the help of employers, the journey toward post-career life can seem light years away. So as a business owner, you can make that journey less daunting by offering your employees retirement plans that will accelerate their timelines and keep them happy while they’re working.
But what’s the best option you can present to your workers?
More often than not, we recommend a multiple-employer plan (MEP). An MEP is a retirement savings plan where multiple employers participate in a single plan.
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Small Businesses with Big Business Plans
Offering a retirement plan isn’t always the easiest for small businesses. It can be costly, time-consuming, and complex to administer. These are some of the main reasons only about half of the small businesses in the U.S. offer retirement plans for their employees.
One of the easiest ways to overcome these challenges is partnering with a professional employer organization (PEO) to help you set up a plan that will make your small business feel more like a large corporation.
Not only does this give you time and resources back, but it also allows employees to access better plans that will help them save more money faster. Offering a top-tier retirement plan will also play a major role in your recruiting and retention efforts.
Additionally, without a partner to help, you also risk missing out on higher investment returns.
MEPs Help Mitigate Risk
As a business owner, it’s your responsibility to continue to grow your organization. However, you shouldn’t have to feel the pressure of completing back-end HR tasks on your own. Without additional help or resources, you run the risk of making mistakes.
Most business owners are not legal experts, so if you make a mistake, omit something, or otherwise mismanage the plan, you could be personally liable under ERISA.
Allowing a PEO to handle benefits, such as retirement plans, helps to eliminate great risks.
Businesses Save Money with an MEP
An MEP provides you access to financial support from partners and increased resources. In terms of resources, you will now have assistance to shop, negotiate, and manage plans.
This, in turn, can help you save a lot of money! However, having a great negotiator isn’t the only way an MEP can save you money. Let’s think about it in the context of wholesale stores. When you buy in bulk, the cost per item goes down.
When large corporations offer retirement plans for thousands of employees, they get discounts. The problem small businesses face is that they don’t have nearly as many employees and won’t get the same discount. In fact, small businesses are paying up to four times as much as large corporations because they lack the “buying power.”.
If you opt into an MEP with a PEO, which operates on a co-employment model, you can get much larger discounts because that PEO could be managing thousands of employees.
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MEP is the Way to Go
Of course, money and resources are always going to be the biggest concerns for business owners when it comes to retirement plans. But these concerns can be lessened drastically with a PEO that offers an MEP. Small businesses that offer retirement plans under the MEP model with Vensure and our partners at Slavic save $7,000 per year, on average. Not to mention, any business that works with Vensure gets immediate access to Slavic’s retirement offerings. You can learn more here.