Let's talk business Q&A

Q.

My employees are essential to my business’s success. I want to give them the benefits they want and need most. But, I also want them to understand how much their benefits actually cost. Is there a way I can communicate this information effectively?

A.

A benefit statement is one of the most effective ways to communicate your benefit costs to your employees. The statement is simply a list of benefits (whether you pay all or just a portion of the cost) and the amount you spend to provide them. In addition to showing wage and salary compensation, benefit statements also show the cost of health benefits, paid time off, life and disability insurance as well as any other benefits you offer. You can choose to illustrate your costs in dollar terms or as percentages of each employee’s total compensation. It may be particularly effective to send out a benefits statement at the same time you distribute your employees’ W-2 forms.

Q.

Can I make a profit-sharing contribution to my business’s 401(k) profit sharing plan even though I have not made one for several years?

A.

Employer contributions to a profit sharing plan are usually discretionary. This feature allows businesses like yours to change the amount of contributions each year — or to not contribute — as business conditions warrant. So if your finances are in good shape and you have made decent profits, you should look into making a contribution to your profit sharing plan. Everyone benefits – when you add to your and your employees’ retirement accounts, you’ll also lower your company’s income tax bill for the year because employer contributions are tax deductible (within tax law limits). You have until your company’s tax filing deadline (plus extensions) to actually make the contribution.

FINRA Reference FR2017-0427-0092/E 08/02/17