As an employer, you play a pivotal role in supporting your employees and their financial wellness. For many employees, a 401(k) plan (or defined contribution plan) is one of their most critical retirement vehicles. We're here to support employee retirement preparedness through education and retirement planning resources.
A defined contribution plan is a retirement plan where both employee and employer make regular contributions to an individual account, such as a 401(k). Unlike defined benefit plans which guarantee a specific payout at retirement, defined contribution plans growth depends on contributions and market conditions. With core capabilities including employee education and communications, relationship management and fiduciary advisory services, we can support you in building a strong plan aligned with the goals of your organization.
Our defined contribution offering emphasizes:
A Pooled Employer Plan (PEP) is a defined contribution plan that allows employers of different sizes and from different industries to join in one pooled plan instead of sponsoring a stand-alone 401(k) plan.
A PEP can help deliver:
As one of the few providers in the market offering access to a comprehensive array of retirement, benefits and financial services, Bank of America understands the role of deferred compensation: not as a stand-alone program, but as part of an integrated, comprehensive compensation and benefits package.
A nonqualified deferred compensation (NQDC) plan is a retirement savings plan that allows employers to offer potential benefits to select employees, often with fewer restrictions and gives your key employees the ability to defer receiving a certain amount of compensation until a point in the future. We help your top talent make the most of this opportunity with dedicated support from a team with a deep understanding of these types of arrangements and the value they play within an overall financial strategy.
We provide NQDC plan services designed to help organizations and their top-level employees get the most from their benefits:
Our complimentary solutions include:
What is a pooled employer plan?
A Pooled Employer Plan (PEP) is a defined contribution plan that allows employers of different sizes and from different industries to join in one pooled plan instead of sponsoring stand-alone 401(k) plans.
Unlike traditional retirement plans—where you carry the full responsibility for plan administration and compliance—a PEP allows multiple employers to participate in a single plan managed by a dedicated Pooled Plan Provider (PPP).
Bank of America Workplace Benefits® offers several retirement plans for small businesses, such as a SIMPLE IRA, a SEP IRA, and a traditional 401(k). For small businesses (less than 10 employees), our advisors may suggest a SIMPLE IRA or an Individual 401(k) for self-employed individuals. A traditional 401(k) or SEP IRA may be more appropriate for those in a larger workplace.
SoloK, SEP and Cash Balance are all options for a retirement plan for self-employed. A SoloK plan is meant for employers who do not have any employees other than themselves and a spouse, if applicable. This plan operates similarly to a traditional 401(k) plan, and allows contributions both as an employer and employee. With a SEP, or Simplified Employee Pension, employers can contribute to their own retirement savings as well as to their employees’. They are required to contribute equally to all eligible employees. With a Cash Balance plan, employers have more control over investments and costs. The employer is able to contribute a specific percentage of each individual employee’s annual compensation with a guaranteed rate of return.
When it comes to retirement plans, employees are often the subject of focus, so you may wonder, “How does a 401(k) benefit the employer?” Thankfully, both parties can experience the advantages of a 401(k) plan. Employers can attract and retain employees, which can help the organization grow while creating a competitive advantage. Businesses can also receive tax benefits and deductions for their contributions. So, while employees can enjoy the savings, there are plenty of 401(k) benefits for employers to experience, too.
New retirement plan tax credits can vary due to a variety of factors including business size and updates on laws and regulations. However, there are two main tax credits to consider for retirement plans for sole proprietors. First is the plan startup costs credit which is for costs to arrange and administer the plan, and to educate employees about it. This covers up to $500 per year for the first three years of the plan. Second is the auto-enroll credit which gives businesses a $500 per year credit for the first three years of the retirement plan when they choose auto-enrollment.
Offering retirement plans as a small business is bound to come with risks. That said, you can better manage your 401(k) fiduciary risk by partnering with qualified professionals who can find the right plan that meets your business capabilities. At Bank of America, we offer flexible service, investment options, and Fiduciary Advisory Services to support your goals.
For more information please email us at Workplace-Benefits@bofa.com.
Let us help you differentiate your business and empower your employees to take control of their full financial lives.
1 Investment products are available from Merrill Lynch, Pierce, Fenner and Smith Incorporated.
2 Employers should carefully evaluate the fees and expenses associated with any Pooled Employer Plan before onboarding. PEP costs can vary and employers should compare pricing and features against other available retirement plan solutions to determine the best fit for their company.
3 Refers to change of heart or management takeover, does not refer to assets.
