Launched in 2012, Slate Medical provides first aid and CPR supplies along with training and education to help organizations build and maintain their workplace first aid programs. The company began operations in California and has since expanded into Minnesota and Arizona. The company has grown to over 40 employees.
When employees began asking for a retirement plan, founder and CFO Eric Podevels took on the process of finding a plan that would satisfy the team, fit the needs of the company, and help prepare employees for their financial futures.
Podevels began the process of evaluating 401(k) retirement plan options about two years ago. He recently shared his insights with us about the process he went through.
How did your organization decide to add a 401(k) retirement plan to your employee benefits?
"As a young company, we didn’t offer a 401(k) retirement plan. My employees approached us requesting a retirement benefit. We were not in a position to offer a matching benefit at the time, but we wanted to provide the opportunity for them to contribute pre-tax dollars. At that point, I began looking at our options."
What was your selection process like?
"We did shop around to understand what different companies had to offer a small business like Slate. We focused on traditional providers of 401(k) retirement programs and contacted the big national investment firms. However, I knew that Paychex offered retirement programs too. We were already using Paychex for our payroll processing, so I included them in the comparison."
What factors contributed to your decision?
"Throughout my executive level career, I worked for three or four other companies that used Paychex as the provider of payroll processing. This was my first experience using their retirement plan. The primary determining factor in selecting Paychex was the ease of administration. Introducing another provider like an investment firm meant having another point of contact and another company to deal with when it comes to employee changes."
What is the main benefit of outsourcing the 401(k) program for your organization?
"Hands down, the most important benefit for us is the integration. When an employee logs onto Paychex Flex, they have access to all their information including their retirement program. If the employee makes a change like updating their address or changing contributions, that change is implemented across all programs. It makes administration seamless and simple. The same is true for the employer. Those changes are automatically linked to the payroll and retirement programs, eliminating the need to make changes in multiple portals. For a small company like ours, it is a terrific time-saver.
"In addition, providing the retirement benefit has had a positive impact on employee retention and satisfaction. It has sparked engagement and discussion about the current status of economic conditions and how that relates to our specific business. The retirement plan has been important to attracting new employees as part of a complete benefits package that aligns with larger companies."
What is a key learning you gained by going through this process?
"I didn't fully understand just how many options there are within a retirement program. Once you have chosen a plan, you can customize the plan to fit your exact business needs. Options like eligibility, vesting, and contribution levels can all be tailored to your specific needs. It's not one size fits all. I think many small business owners may not understand the level of customization available in retirement programs. It's an important point to understand."
What advice would you give another CFO or business owner who is considering offering a retirement plan?
"First, I recommend doing your due diligence in researching the options and evaluating if it makes sense for your business. From a year-end perspective, keep in mind that your tax and compliance reporting is 100 percent integrated as well because Paychex has access to the payroll records.
"Another important point is that a 401(k) plan is essentially a separate entity with its own tax reporting. Paychex has access to the information that is needed for tax returns and reporting for that separate entity as well. It's all about the integration.
"Finally, Paychex will provide local independent investment advisor options to choose from to meet with employees to help them make their own investment decisions. That separates me as their employer, and it protects us from issues around investment advice."
Any final thoughts?
"As my company grows and expands, Paychex works with us to modify the program to meet our changing needs. We can add more features like a company match, employee hardship or 401(k) loans, and profit sharing contributions. Once we have the retirement program in place, we can continue customizing after the initial launch. It gives us so much flexibility."
If you’re considering offering a retirement plan at your business, explore options available from Paychex.