Hey Newsies,
Today we’re talking about employee retirement plans, with an article from CNBC reporting on changes in US state and federal laws to lead to more businesses providing retirement plans to part-time employees in 2024 & 2025. I’d love to hear your experiences on providing these kinds of benefits to your team.
CNBC: More part-time workers to get access to employer retirement plans next year
The article explains that under the US Federal SECURE Act of 2019 and the new SECURE 2.0 Act of 2022, “beginning in 2024, employers must extend eligibility for the company retirement plan to part-time employees who work at least 500 hours per year for three consecutive years. Starting in 2025, Secure 2.0 reduces the work requirement to two years. Companies already have been required to grant eligibility to employees who work at least 1,000 hours in a year.”
There are also new mandates in individual US states to also increase eligibility for employees. Overall, this will lead to more businesses being required to provide retirement programs to more employees across the country. As a result, more people will be able to more easily save for retirement and be in a better financial position later in life.
For some local businesses around the world, it can be challenging to not only understand all of the requirements around employment laws but also to find ways to provide these benefits. Mandates can help make the requirements clearer, and hopefully because of the expanded need, it will become easier for businesses to find providers.
Luckily, Square Payroll (only available in the US) does integrate with Human Resources (HR) and Benefits providers to make it easier to know what the laws are, and to easily take the steps to provide benefits such as retirement plans to your employees.
For non-US businesses, you can find more guidance about setting up pension plans and information on any potential changes from:
- 🇬🇧 The Pensions Regulator in the UK
- 🇮🇪 The Pensions Authority in Ireland
- 🇦🇺 The Australian Prudential Regulation Authority in Australia
- 🇨🇦 The Pension Centre in Canada
In my ice cream shop, we used Square Payroll for several years, which made it a lot easier to handle our payroll and provide some benefits too. We tried out a few different benefits programs that integrated with Square, and our employees absolutely loved that we were able to do it. While not everyone took advantage of it, we were easily able to stay in compliance with the laws without the stress of having to research and create plans on our own.
While it may be initially intimidating to have to provide more benefits, if you have a good provider and system in place, it will be a set-it-and-forget it process that will hopefully be easy to set up!
What’s your perspective:
- If you currently provide retirement accounts or other similar benefits for your employees, how do you go about providing these, and what tools do you use?
- If you don’t provide these benefits yet, are you planning to? Do you have any concerns?
Can’t wait to hear your thoughts!
Pesso
This article is for informational purposes and does not constitute legal advice. For guidance or advice specific to your business, you should consult with a qualified legal professional.
