What Safe Harbor 401k Brings to Your Employees

In the current work environment, we are seeing many employees leaving their positions to search for a better, more supportive workplace. While there are many reasons why an employee might be ready to move on from a company, not having a valuable retirement plan available is a major reason for many people.

A great retirement plan, such as a 401k, allows workers to have some assurance that they are investing in their future. Beyond that, it gives workers a sense that their employers are looking out for their employees’ best interests.

But 401k plans are complicated. For instance, they require paperwork to be filed on a regular basis, they must be monitored to ensure all of the information is up to date, and they are subject to yearly testing by the IRS to make sure all contributing members are being treated fairly.

However, passing the IRS tests can be done easily through the use of a Safe Harbor 401k.

How the IRS Tests 401k Plans for Fairness

Every year, there are three tests that businesses with 401k plans must pass. These tests are:

  • The ADP Test. Those who make the most money within a company should not be able to invest significantly more into their account than those who make less. For this reason, the ADP (Actual Deferral Percentage) test places a maximum amount on the percentage of income that a high-earning employee can contribute to his or her fund.
  • The ACP Test. When it comes to employer matching, all employees should be considered equally. Thus, the Actual Contribution Percentage test is implemented each year to ensure that employer matching contributions are proportional for both high-wage employees and lower-wage employees.
  • The Top-Heavy Test. With regards to the total balance of the retirement plan, the most highly-compensated employees within a company cannot maintain more than 60% of the plan balance. If they do, the plan is Top-Heavy.

The logical question pertaining to these tests is: “What happens when a business fails?” Failing one or more of these tests is something to be avoided. Paperwork, time, and monetary penalties are the punishments for failing an IRS compliance test.

Safe Harbor Plans: How They Work

Safe harbor plans ensure that businesses automatically pass the IRS tests by insisting that 401k plans are maintained with matching contributions or non elective contributions for all employees, regardless of how much they make or contribute to their plans.

Can I Still Set Up a Safe Harbor Plan for 2021?

Sadly, for those that were hoping to start a new Safe Harbor 401k plan in 2021, the deadline of October 1st has passed. That being said, if you are simply hoping to add a Safe Harbor Provision to a plan that is already in place, you still have some time. The deadline for adding a Safe Harbor Provision is November 30th.

If you have questions or concerns about setting up a Safe Harbor plan for your company, representatives are standing by to take your call. Don’t delay, the deadline is fast approaching!

HR Future Staff Writer

10 Ways To Coach And Nurture Individuals To Be Confident In Their Roles

Confidence issues in the workplace are common. A lot of people feel that they’re not good enough or that they hold back from certain situations because they lack some self-belief. The skills and experience are all there, but they may find it hard to speak up or to pursue opportunities that will help with their development.

When your employees feel confident and capable in their jobs, they can go on to do amazing things. As a manager or an employer, it’s important to be able to build up your staff so they feel empowered in their roles and produce outstanding work for both the business and themselves.

Developing your employees’ confidence benefits them and the business, and there are a lot of things you can do to help them get there. Take a look at these 10 ways to coach and nurture individuals to be confident in their roles.

1. Be respectful 

Respect is an important part of any successful workplace. When colleagues respect each other, there’s a much more positive workplace culture, and communication becomes much easier. Demonstrating respect in the workplace includes really listening to each other and being supportive and encouraging with their ideas. You also need to pay attention to body language and act on things that are being said. Keep an eye out for signs that someone is struggling with their confidence to find ways to help them.

2. Support them with regular feedback

It’s easy for someone to take for granted that someone either knows what they’re doing, or that they’re doing it well. However, a lot of people lack the confidence to speak up to ask for help. Hold regular meetings with your team to discuss their work and to give them the opportunity to ask questions. Feed back to them about how they’re performing – a little reassurance may be all that’s needed for people to feel more confident in what they’re doing.

Many managers have an open-door policy, which is a great way to develop trust and let your employees know that you’re there to listen.

3. Lean on their knowledge and experience

When you hire someone for your team, you hire them based on their skills and experience. And you should trust that expertise and lean on it to inform projects and to help your employees feel valued. By asking your employees for their advice and feedback, you help them feel more empowered, letting them know their contribution is valued. Be open to asking for opinions and ideas, your employees will relish the chance to share their thoughts.

4. Praise their achievements

When you work hard on something, you want your efforts to be noticed. Busy organizations can often forget to thank people for their hard work, because the next job or project has already been started. But praising the achievements of your employees is more than just a token gesture, it can help show them they’ve succeeded and feel positive about what they’ve done. There are a lot of great ways to compliment your team that will show your gratitude and help them feel like they’ve really nailed it.

5. Encourage them to pursue training and development opportunities

When you feel more competent and experienced in your job, you feel more confident in doing it. And providing training and development opportunities is a great way to help employees feel more capable in their roles. Providing training to employees will keep their skills sharp and help them progress in their careers too. It’s important that your employees keep learning, and an excellent employer will always encourage individuals to take on training opportunities where possible.

6. Help them network

Many people believe that networking is just something for people who are already confident in their roles. But networking can also build confidence. Networking provides a great opportunity to meet people in similar fields and develop contacts that can come in handy in the future. You should encourage network opportunities for your employees, or even set them up yourself. 

Provide any employee who wants them with painted edge business cards as a great way to make connections and to help them strike up conversations. By networking, they could get the opportunity to grow and become known by others in the industry, leading to exciting things for both them and your business.

7. Get them to share best practices and expertise

Another great way to help someone feel more confident at work is to ask them to share their knowledge and expertise. You could ask an employee to mentor or train others, recognizing that they are a knowledgeable person with something to teach others. 

You could start on a one-to-one basis, before building up to team or organization-wide knowledge-sharing that is sure to help them feel more confident and become more well-known around the business.

8. Create a team environment that’s open and collaborative

More and more businesses are realizing the value of having open, collaborative teams. It helps make project work easier and more enjoyable, but it also encourages all members of the team to share ideas and pitch in. By building a collaborative team, you’ll allow individuals to feel more empowered and supported, and it will help everyone learn from each other too. Some of the things you can do to help create a more collaborative team include:

  • Hold brainstorming sessions to talk through projects and upcoming work
  • Hold regular team meetings for people to discuss what they’re working on.
  • Enjoy some social time together to help people feel more comfortable with each other – you can even do this virtually if your teams are remote.
  • Group training and team building are also good ways to help teams learn to work well together.
  • Share your successes together and learn from mistakes and failures together. 

Creating this environment isn’t always easy, especially now that many people are working remotely or facing some uncertainty post-COVID. Fortunately, there are ways to keep your team positive at this time, which can help.  

9. Get to know them well

Getting to know your employees is important. In large organizations, especially, it can be easy to feel anonymous or invisible. Get to know people well so that you develop great relationships. You don’t have to be friends and socialize with someone outside of work, but it’s nice to have a bit of familiarity and rapport to help someone feel happier and at ease in the office.

When you develop good relationships with your employees, you’ll develop mutual trust and respect, helping everyone work more effectively together.

10. Ask them what they need to succeed

Being an effective manager means being able to help your team develop and reach their goals. To do this well, you need to help them set professional development goals and work with them to achieve them. By providing opportunities for an individual to grow, they get the chance to test their skills and build confidence as they progress. Regular progress meetings are key to making sure they stay on track, while also ensuring that new goals are being set. Ask your employees what they need to be able to succeed, then give them the tools to make it happen. 

While some people are born with confidence, others can develop it over time. Being a supportive and nurturing manager will help you bring out the best in your employees so that they can feel pride in what they do. Like any good mentor, you’ll also feel proud knowing you’ve helped someone realize just how great they really are. 

HR Future Staff Writer

Image Credit: Unsplash under Creative Commons

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