A higher salary might not be as effective to attract recruits as providing generous benefits, such as larger employer matching contributions in retirement plans, Hub suggests.
A small section of Tuesday s spending bill will help some employers avoid partial plan terminations
December 22, 2020 2 MINS
Small businesses that have laid off or furloughed workers this year may have one less worry, at least when it comes to their retirement plans, thanks to an emergency measure approved Monday by Congress.
Retirement savings provisions are scant in the Taxpayer Certainty and Disaster Relief Act, which is attached to the 2021 appropriations bill. But a short section of the legislation gives plan sponsors an extra three months of breathing room to avoid the consequences of partial plan terminations.
Normally, a reduction of 20% or more in a firm’s head count in a year can trigger partial plan terminations. In such cases, an employer must pay the full amount of any matching contributions in the separated employees’ 401(k) accounts, even if those employees were not fully vested at the time they were laid off or furloughed. That can mean