Employee H.E.L.P.
Ditch the 401K Save Money and Decrease Taxes with a H.E.L.P. Employee Retirement Program instead of a 401K
When you search your competitors online to see what kind of attractive benefits they offer employees there’s a temptation to model their offer: flex time, medical spending account, a gifting portal with discounted rates on shaving kits and mail order cheese, oh, and the ubiquitous 401K.
Most businesses opt into a 401K program offered through a major investment firm simply because it’s the norm, but check your facts, because a retirement program is first of all a perk, not a requirement, and second, there are several options for employers and employees for retirement planning other than IRAs and 401K programs.
The program we find to be most successful for both employers and employees we call the Happy Loyalty Employee Program (H.E.L.P.) How does it work? Employers set up an Investment Grade Insurance Contract (IGIC™) for the employee, set vesting terms, company contribution and employee contribution or match, and let the H.E.L.P.
Program do its work. Employers receive a tax deduction and save 100% of set up fees and annual verification fees required by 401K programs.
Benefits to Employees
Employees appreciate H.E.L.P. programs because they provide both a vesting option, where their cash balance grows with their years of service that can be accessed before retirement with a non-taxable loan, tax free funds available at retirement and a death benefit to pass on money to take care of their family for the long term.
In addition, for high income individuals there is no maximum contribution cap (of $6000 annually, based on current regulation) as there is with a Roth IRA or traditional IRA. There are actually very few, if any down sides for employees. The program actually provides a guaranteed rate of return, quite unlike the stock market.
Benefits to Employers
Employers not only provide a better retirement and life insurance option for their employees, but they can retain employees longer with greater commitment to the organization through the vesting option. The cash value in the program can be assigned to the employer and transferred to the employee based on years of service. Compared with stock options, this can increase employee retention for a longer period with less cost to maintain the program.
Employers also receive an immediate tax benefit, as contributions are deductible from their annual tax burden. This gives employers an incentive to support the program as a way to increase employee total compensation without the burden other programs create.
The H.E.L.P. program gives employers great latitude in how they create and apply the program. Because it is a private program, it doesn’t come with the same regulatory requirements or costs to administer.
Even better, the unvested balance in the account can be leveraged by the organization for low interest loans. These funds can be applied to revenue generating activities, increasing total earnings of your organization, and providing the means to expand, hire team members and to invest more into the program.
Set up Your Employee H.E.L.P. Program
Let’s start a conversation to determine if the H.E.L.P. Program is right for you. If you prefer to go with the flow, have few concerns about startup and administration fees, and want something that looks like the program offered by everyone else, H.E.L.P. is not right for you.
On the other hand, if it’s important to you to reward and retain your best and brightest, and your high performance team can’t be replaced with a quick LinkedIn or Indeed ad, and you want benefits such as tax benefits, ability to leverage the unvested balance, greater employee satisfaction and retention, then H.E.L.P. may be right for you.
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Contact PMC Finances today to find out more about protecting and growing your wealth. Our consultation services ensure that you find the absolute best option for your hard earned money.
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338 South Rosemead Blvd.
Pasadena, CA. 91107
Main Line: (657) 657-0076
Fax Line: (657) 657-0676