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Brennan Financial Services
14785 Preston Road, Suite 780
Dallas, TX 75254
Phone: 972-980-PLAN
Fax: 972-980-7859
info@brennanfinancialservices.com
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Employer Sponsored Payroll Deduction Retirement Plans
The tax code has been changed to allow employers and employees to partner for the benefit of both parties. Employers provide pension plans for the specific purpose of attracting and maintaining good employees. Longevity of a successful company is important to the management of the organization. It costs money to set up a plan, interview potential investment companies that will manage the funds of the plan and hire separate companies to maintain the records of the plan to include the ongoing contributions and withdrawals by employee and employer.
According to the tax code the type of plan and offered investments are determined by the employer. The most popular plans include the 401(k), 403(b) and 457. The plans generally adhere to the kind of business the employer conducts. The 401(k) plan is usually for profit oriented organizations while 403(b) is for nonprofit groups such as schools, hospitals, and foundations, and 457 plans are available for local government activities. The number of the plan such as the 401(k) is from section 401(k) of the Internal Revenue Tax Code (IRC).
Each plan can be designed to achieve certain goals such as vesting requirements which requires each employee to work a certain number of years to receive the employers’ contribution and also an employment service policy of one year at the most to participate in the plan. The amount that can be contributed annually by each employee is deducted from the taxable income on the information provided on the W-2. This method represents a wonderful tax incentive as each employee converts taxable income into a future retirement plan.
At Brennan Financial Services we provide all of these plans to employers to help them meet the financial needs of their employees.