Benefit Insights Newsletter - Summer 2024

Most business owners focus most of their attention on revenue and growth, thinking about taxes only when necessary. Yet the structure of a business plays a pivotal role in retirement planning, influencing contribution limits, deductions, and long-term outcomes. Understanding the relationship between entity type and retirement planning is critical to maximizing contributions, deductions, and long-term retirement income.

For many employers, payroll is the operational backbone of the organization. It touches compensation, taxes, benefits, and reporting—so it’s understandable why retirement plans are often bundled there as well. If payroll providers offer a 401(k) solution, it can feel efficient to keep everything under one roof. But efficiency in payroll processing is not the same as effectiveness in retirement plan administration. As retirement plan regulations grow more complex—particularly under SECURE 2.0—many plan sponsors are discovering that payroll platforms simply weren’t designed to handle the interpretive, judgment-based responsibilities required to administer a qualified retirement plan.