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26 February 2016 • www.CPAPracticeAdvisor.com A YEAR IN THE LIFE: PAYROLL ACCOUNTANT • Determine the actual costs. While funding an employee retirement plan can seem like a daunting expense, small business owners who offer 401(k) plans can deduct contribu- tions as a business expense. Tey may also be eligible to receive a tax credit of up to $500 to help ofset startup administrative costs for each of the frst three years of the plan. In addi- tion, their employees will be able to save in a tax-deferred account while reducing their current taxable income based on their contributions. • Analyze the impact on employee engagement. 401(k) plans can help small businesses atract and retain top talent in an increasingly competitive labor market. A recent MetLife study found a strong connection between employee benefts and job satisfac- tion: 81 percent of those who are satisf ied w ith their benef its, for example, are also satisfed with their jobs, compared to 22 percent who expressed dissatisfaction with their benefts but are satisfed with their jobs. A separate study by Tower Watson also revealed that benefts fuel employee loyalty: 45 percent of U.S. workers said their retirement plan is an important reason for staying with their current employer and 29 percent said having a retirement plan is an important reason for deciding to join their current employer. • Outline key planning and mainte- nance needs upfront . Help small business owners understand what is involved with ofering a 401(k) plan to their employees and where they can turn for help with: adopting a writen 401(k) plan document, arranging a trust for the plan's assets, developing a record keeping system and providing p l a n i n f o r m a t i o n t o e l i g i b l e employees. Once a 401(k) is up and running, the focus needs to transition to plan management. Tis includes ongoing maintenance activities, such as monitoring par ticipation and contributions, selecting and moni- toring an investment lineup, handling reporting requirements, educating participants about plan options and determining how to distribute plan benefts while complying with fdu- ciary obligations. With so much to juggle at once, sm a l l bu s i ne s s ow ner s m ay fe e l overwhelmed by the process. Tis is where accountants can step in and provide valuable strategic counsel. W it h t hei r spec ia l i z ed f i na nc ia l skills and tax preparation expertise, accou nta nts br i ng a deep u nder - standing of the role retirement plans c a n p l a y i n l o w e r i n g a s m a l l employer's tax obligations. Tey can a l so help sma l l bu si ness ow ners determine how to maximize savings, bet ter u nderst a nd t hei r f u nd i ng responsibilities and key deadlines for employer contributions, review pa r t ic ipa nt cont r ibut ion s (ma x- imum limit is $18,000 in 2016 and $24,000 for those 50 and older), and assess important administrative and repor t i ng requ i rements. Helpi ng sma l l businesses to establ ish and manage a retirement plan can be a smart long-term investment for both accountants and their cl ients. By demonstrating their fnancial and t a x e x p e r t i s e , a c c ou nt a nt s w i l l rei n force t he va lue t hey br i ng to their clients and strengthen impor- tant relationships. With f inancial planning as a core business ofering, accou nt a nt s w i l l a l so be able to atract new clients and broaden their customer base, taking their practice to new heights in 2016. How Small Businesses Can Offer 401(k) Plans By Joe DeSilva A s small businesses increas- ingly turn to their accountants f o r s t ra te g i c c o u n s e l a n d oferings that will help drive g r o w t h , a c c o u n t a n t s c a n capitalize on new opportunities to expand their practice and enhance client service. According to research from The Sleeter Group, small business owners' top criteria for selecting CPAs are expertise, responsive- ness and ofering proactive strategic advice. In addition, many small businesses want their accountant to be a specialist in their industry with a deep understanding of their specifc business issues and challenges. Because 401(k) plans can help small businesses atract and retain the skilled employees key to fueling growth, adding fnancial planning services - specifcally retirement planning - is a great place to start. A recent study by ADP found that fnancial planning is ofered at only 35 percent of accounting frms while just 20 percent provide wealth management. Tis presents accountants with a sizable oppor- tunity to grow their business and deepen relationships with their small business clients by providing meaningful financial advice. As a growing number of accountants consult with small business owners about establishing 401(k) plans, they should focus on several key considerations: Joe DeSilva is General Manager and Senior Vice President of ADP Retirement Services, which serves approximately 55,000 small and medium sized busi- nesses who have defned contribution plans with approximately 1.5 million plan participants. At ADP, he oversees business strategy and operations includ- ing marketing, product development, operations and service functions.