Planning and Managing a Business Retirement Plan – Government eTools That Can Help

Are you self-employed and trying to understand your retirement savings plan options? Are you perhaps an employer who wants to offer your employees a retirement savings plan program?

There are many ways to fund a retirement plan. In some cases, employers contribute. In others, employees or both (employer and employee) contribute. If you have no employees, your options are different again. The program you choose may dictate which options are available.

Even after you’ve chosen a plan, it will take more work and diligence to maintain it. Plan requirements change and it’s your responsibility to know when they do. That’s why reviewing your retirement plan each year helps ensure it’s compliant with current tax laws. Like routine physicals, retirement plan check-ups can help you prevent problems or detect them early.

The good news for employers and the self-employed is that the government offers very useful online tools to help you choose a retirement savings plan, maintain it and even make corrections to your plan to protect participants’ benefits and keep plans in compliance with the law.

Determine the Right Retirement Savings Plan for Your Business

If you are interested in offering your employees an employer-sponsored plan, then you need to understand your options. The Department of Labor’s online Small Business Retirement Savings Advisor is a useful first stop to finding the right plan for you.

The Advisor is part of the DOL’s wider elaws Advisors program that gives both employers and employees easy-to-understand information about a number of federal employment laws. 

Simply answer a series of Yes/No questions and the Advisor will suggest retirement plans appropriate to the number of employees you have, whether you want to have a plan funded by employer, employees or both. It also offers links to the required IRS reporting forms for each plan.

Navigate Your Retirement Plan and Stay Compliant with IRS Laws

Another useful online resource for employers is the IRS Retirement Plans Navigator. This glossy tool not only helps you understand more about plan options, it also helps you manage a well-run plan – both for the benefit of your employees and in line with current federal tax law.

Giving your business retirement plan a check-up, whether it’s a 401(k), IRA, SEP, or 403(k), can also help you save time, money and paperwork, and increase tax return accuracy. Some of the common mistakes the IRS looks out for in retirement plan examinations include:

• Not covering the proper employees
• Not giving employees required information
• Not depositing employee deferrals in a timely fashion
• Not following the terms of the plan document
• Not limiting employee deferrals and employer contributions to the proper maximum limits

These errors can have an impact on the tax benefits accrued from operating a business retirement plan and expose you to audits and penalties, so it's a good idea to continuously monitor and review your plan. The IRS Retirement Plans Navigator is an essential tool for keeping your plan compliant and includes useful plan check-ups that can help you prevent problems or detect them early. You can even make appropriate plan changes without having to notify the IRS.

Related Resources

• Which Laws Apply to your Small Business? There'san E-Tool for That
• 4 Tips for Giving Your Business Retirement Plan a Check-Up; Before the IRS Does!
• 7 Tips for Preparing for an Early Retirement Now

About the Author

Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the SBA.gov team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesley