Recent research by the Pew Charitable Trusts shows that just over half of the small and midsized businesses surveyed offer a retirement plan. While there are a number of reasons small businesses don’t offer retirement benefits, making them available is a smart idea that’s good for both owners and employees. As an accountant and trusted financial advisor, you can help your small business clients understand the value of 401(k) plans and how they contribute to business success.
Govenor.ny.gov: Governor Cuomo Announces New Paychex Campus in Monroe County to Support HR Services and Technology Growth
Governor Andrew M. Cuomo today announced that Paychex, Inc., a payroll and human resource services company, will move its operations from leased facilities throughout Monroe County to one centralized location in a new multi-building campus in the town of Henrietta. As part of the $58.4 million project, the company will acquire five parcels of property and renovate more than 300,000 square-feet of existing space at the site. Paychex will also retain locations it currently owns in the towns of Brighton, Henrietta, Webster, Penfield, and its company headquarters located in Rochester. The project, which is currently underway, is expected to be completed in July of 2018 and will create 625 new full-time jobs over the next five years.
Paychex Inc. appears to be striving to capitalize on the rising opportunities in the professional employer organization (PEO) industry. In this regard, the payroll and human resource solutions provider recently acquired Charlotte, NC-based HR Outsourcing Holdings, Inc. (HROI) for an undisclosed amount.
A 401(k) is a retirement saving plans provided for employees by their employers, which allows workers to save a portion of their pay check before taxes. Despite the benefits of a 401(k), just 14 percent of all employers offer a defined retirement contribution plan to employees, based on U.S. Census research into tax data. This could be because more people are working for small employers, which tend to believe it's too expensive or complicated to offer retirement savings plans.
The majority of small- to mid-sized businesses (SMBs) do not offer health, retirement or other ancillary benefits, Paychex found in a survey of 318 such companies. Only 38% offer such benefits. “While this contrasts national levels, it does reflect in part the absence of legal requirement for businesses with less than 50 employees to offer benefits—most notably, health insurance,” Paychex says. “Providing benefits is also a matter of economics for many SMBs. Of businesses earning less than $500,000 in revenues, 78% reported that they do not offer benefits. This is in contrast to responses from businesses with revenues of more than $1 million, where 74% confirmed that they do offer benefits to their employees.”