The evolution of a 401(k) plan typically sounds something like this:
The owners want to implement a plan because their business is growing and they want to shelter some of those dollars. With growth comes more employees, and now it’s important to have a lot of them participate so it doesn’t affect the owner’s contribution amounts in testing. Eventually, businesses begin to attract great talent and you want them to stay, so the business owner decides to throw in a match. Great – this all sounds perfect. But, the growth and changes to the plan shouldn’t stop there.