As of June 30, 2022, companies with 5+ employees MUST offer a 401k plan to their employees. Larger employers had earlier deadlines.
What’s a 401k Plan?
A 401k plan is an employer-sponsored defined-contribution pension account defined in subsection 401k of the Internal Revenue Code. Employee funding comes directly from their paycheck and may be matched by the employer.
How long does it take to set up a 401k program?
It can take months to set up a program.
What if I don’t set up a program?
There are government-imposed fines for not setting up a program in time. Penalties are $250 per employee.
What are my options?
There is a free state-sponsored program called CalSavers. VMA has done the research and strongly recommends our members against choosing the CalSavers program for the following reasons:
VMA has evaluated several 401k plan providers, and VMA recommends the following two options:
Both 401k providers offer fully compliant low-cost plan designs with excellent investment options.
Note: VMA does not receive any financial compensation or gain from any of these options.
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