paychex 401k & fsa

Download Paychex 401k & FSA

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Explore the benefits for you and your staff to add the Paychex payroll-integrated 401k plan and Flexible Spending Account program

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  • 1. Pre-Tax Benefitsfor small businesses

2. Why Start a Retirement Program?

  • RETIREMENT

3. TAX- SAVINGS 4. CANNOT PREDICT FUTURE, ONLY PREPARE 5. ATTRACT HIGHER QUALITY EMPLOYEES 6. RETAIN CURRENT EMPLOYEES2
7. Retirement a three-legged stool
Retirement
Personal Savings
Company Sponsored Plans
Social Security
8. Social Security ??
Read the following excerpt from the Social Security Administrations website:
Social Security was never meant to be the sole source of income in retirement.
A comfortable retirement is based on a three-legged stool of Social Security, company-sponsored retirement plans and personal savings.
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9. Pre-Tax Growth vs Post-Tax Growth
*Assuming 25% tax rate, 10% rate of return, compounded only monthly
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10. Your Tomorrow Starts Today

  • Investing early pays off due to compounding interest

11. What is compounding interest? 12. The process of reinvesting interest to earn additional interest 13. The more frequent the compounding, the more you earnThe example below shows the difference a head start can make
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14. Cannot Predict Future, can only Prepare for it
In addition to the battle against inflation as you can see in the chart on the right, retirees are living longer and longer.
Recent studies have shown that a typical retiree can expect to live 20+ years.Therefore, one must acquire a large nest egg.
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18. Attract Top Employees
Studies show that without benefits, outside of acquaintance or luck, a business owner cannot attract the best quality EMPLOYEES
Research shows small businesses need retirement benefits*
While some research shows that small business retirement plans are too expensive for their potential customers, a new survey underscores the fact that employers might want to reconsider that notion.
By Editorial Staff
While some research shows that owners think small business retirement plans are too expensive, a new survey underscores the fact that employers might want to reconsider that notion. Fidelity finds that 49% of workers with a retirement plan say the would not take a job with a company that doesn't offer one.68% percent of employees said that a retirement plan is critical or very important. Just 36% of employers said it was critical or very important to their staff recruitment and retention efforts.
* 2007 Employee Benefit News and SourceMedia, Inc.
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19. Retain Current Employees
If youre not offering a retirement plan to your employees, dont be surprised to lose them to a competitor that does!
Misconceptions about 401(k)s could cost Small Business Owners
By Lynn Gresham
Forty percent of workers in small companies say they would leave their job for one that provided a 401(k) plan, according to a survey conducted by Harris Interactive and sponsored by ShareBuilder 401(k), a subsidiary of ING Direct. . . .
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20. What is the actual cost of one bad hire?* Information provided by Right Management Consultants.Mishires financially impact an organization beyond direct sourcing costs.According to a survey* of 444 organizations throughout North America, the negativeconsequences of bad hires and promotions reach beyond lost customersand market share. Here are some alarming statistics: Replacement costs an average of 2 times* an individual's salary, includingrecruitment, training, severance costs, and lost productivity. More than 4 of 10 organizations (42%) said it costs at least three timesthe mishire's salary.
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21. How Do You Get Money In?
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22. How Can You Maximize Your 401(k)?
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23. Your 401(k) plan, easy as 1-2-3
3 Simple decisions to start your plan today

  • Eligibility

24. Money Manager 25. Optional Match/Vesting16
26. Possible EmployerMatching/Vesting Contributions
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27. IRS/DOL
Money Manager
Participants
Employer
Payroll
Bank
Record Keeper
Non-Paychex 401(k) Paradigm
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28. The Paychex Advantage:
A Seamless Flow of Contributions
Investment
Provider
Paychex
Client
Power of Paychex Integrated 401(k)
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29. What Paychex Does For You

  • Required Legal Documents

Adoption Agreement
Plan document
Summary Plan Description

  • Preparation of Form 5500

30. Preparation of Forms 1099-R and 945 31. Quarterly IRS nondiscrimination testing 32. Quarterly management reports 33. Quarterly participant statements 34. Daily valuation of account balances 35. Account access via participant website and automated phone system 36. Toll-free phone support 37. Loan modeling and administration 38. Roth option 39. Discretionary profit sharing plan 40. Deferral calculations for pre-tax and Roth 41. Electronic recordkeeping and fund transfer each pay period 42. Payroll integration of employee and employer contributions and census data 43. Enrollment meeting and enrollment kits 44. Automatic enrollment20
45. Money Manager Options
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46. Small BusinessFlexible Spending Accounts
47. What is a Flexible Spending Account?(FSA)

  • Its part of the IRS tax code: Section 125

48. Allows employees to take certain out-of-pocket expenses on a pre-tax, rather than a post-tax basis:Medical
Dental
Vision
Over-the-counter items
With a Drs Prescription
Dependent Care
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49. Benefits of an FSA

  • Employee:

50. Federal Income Tax Savings 51. Tax savings on FICA 52. State Tax Savings 53. Employer: 54. Savings on FICA tax 55. Workers Comp Savings (CA only)APPROX. 12% SAVINGS ON PAYROLL TAXES
APPROX. 25% - 45% SAVINGS ON EXPECTED GOODS AND SERVICES
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56. FSA has 3 buckets
Plan Features
3) Out-of-pocket medical, dental, vision, and over-the-counter expenses
Insurance premiums
2) Dependent Care expenses
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57. What Paychex Does For You

  • Required legal documents and plan changes

58. Regular non-discrimination testing 59. Enrollment meeting and enrollment materials 60. Payroll integration (payroll clients only) 61. Participant website and toll-free support 62. Employer and employee status reports 63. FSA Debit card 64. Weekly claim processing 65. Direct deposit of reimbursements 66. Discretionary employer contributions allowable through employer funded FSA26