The Increasing Importance of Offering 401K Retirement Savings Plan to Employees

Find out why more and more employers are in search of a 401K investment manager.

Before, employees were awarded with a specific amount of funds upon retirement via their company-sponsored pension plans. At present, the pension plans are gradually becoming obsolete. Because of this fact, it is the responsibility of employees to invest or save so that they have sufficient funds that they can use once they retire.

Best 401K Investment ManagerTo successfully employ this shift in responsibility, so as attract and keep explicit employees, the number of employers that are offering the so-called 401K plans is increasing. These employers offer the 401K retirement savings plans as among their benefits package. This type of retirement savings plan is sponsored by the employers, whereby the employees can lessen a portion of their income (pre-tax), and then invest the deducted amount in a valise of investment options.

Employers can select to add extra value to the existing plan by contributing or matching to the investment of the employee. For instance, there are some companies that invest $0.50 for each $1 that the worker invests. A Certified Pension Consultant, Mr. Matthew D. Hutcheson, provided an explanation of the 401K plans.

As quoted by Mr. Hutcheson, there are 3 primary types of 401K plans which employers can offer to the participating employees. These allow the participating workers to have pre-tax contributions via payroll deductions:


This is considered as the most famous 401K plan. In this type of plan, the employers have the option to have contributions on behalf of the employees who participate, to match the deferrals of the employees, or do neither or both.

Safe Harbor

In this kind of 401K retirement plan, the contribution of the employer is a must, or simply, mandatory. Among the options that the employers can have are non-elective contribution to each and every worker or matching contribution percentage for the participants. Under this plan, the contributions of the employer are 100% vested always.

Full Flex

This 401K retirement savings plan enables the employer to ascertain the kind of contributions they want to make every year. Whether through matching, fixed sum, or profit sharing, the employer can be flexible on the frequency, amount, and the kind of contributions that they make.

Mr. Hutcheson highly believes that the employers should offer 401K plans. He believes that these plans are not only for the good of the employees but also for the society in general. Mr. Hutcheson believes that the 401K plans is not just a method of benefitting the employees. It is a magnificent economic security tool not only for the business, but also for the economy.

When the employers give their employees the tools that they need in order to retire comfortably, they are molding workers with disposable income to use in the society and to maintain the economy in motion.

If you are planning to put up a business, do not overlook the importance of offering 401K retirement savings plans, and the need to find an exemplary and reliable 401K investment manager.

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