Advantages of Adding a Governmental 401(a) Plan
A defined contribution 401(a) plan is a tax qualified retirement plan which can allow governmental employers and employees to contribute to the plan. There are several situations which can make a 401(a) plan attractive to governmental employers such as:
- Employee Retention (PDF)- Helps aid retention with plans that can be designed to incent and reward employees.
- Discretionary Employer Contribution (PDF)- Gives a governmental employer the ability to contribute to an employee’s retirement account on a discretionary basis.
- Match Plan (PDF)- Incents employees to contribute to a 457(b) plan, with the employer matching employee contributions.
- Social Security Replacement (PDF)- For plan sponsors who are eligible to sponsor this type of plan, the plan requires a minimum contribution of 7.5% of the participant's compensation. This contribution can be from either the employee or the employer or a combination. Contributions can also be a greater percentage than 7.5%
Nationwide Retirement Solutions offers the services and tools public sector employers need to create and manage 401(a) plans for their employees. Please call your Nationwide representative to see how adding a Governmental 401(a) Plan can be beneficial to you and your employees.