CPAs looking to add a niche to their business consulting services would be wise to consider employee benefits retirement benefits planning.
Reports from the American workplace find that workers are frightened about not having enough saved for retirement and that businesses should be equally scared about whether they are offering the right retirement plans to keep their employees on board.
One survey, sponsored by the Transamerica Center for Retirement Studies, finds that half of all workers employed by companies that do not offer retirement plans would leave for an employer that offers such benefits. Meanwhile, businesses may be underestimating how important retirement benefits are to keeping their workers on board. While 58 percent of workers surveyed said they would prefer better benefits over a higher salary, only 22 percent of employers said they feel their employees value benefits above pay.
The issue may be especially acute at smaller companies of less than 500 employees. While 60 percent of workers at large companies offering retirement bennies said they felt their employers were providing adequate information about the plans available to them, less than half their counterparts at smaller companies felt the same way.As trusted business advisors, now is the time for CPAs to alert clients, particularly those scrapping to keep talent on board, that they cannot over-estimate the value of offering retirement plans, and to help them put plans in place.
For CPAs who intend to advise small businesses on retirement planning, the following checklist of action items, prepared by Cynthia Scarinci, assistant professor of accounting at the College of Staten Island, was published in the Journal of Accountancy:
? Get the facts together. Prepare a fact sheet of key company data including annual profit for the past 5 to 10 years, annual payroll costs (wages and services), number of full- or part-time staff, hours worked by part-time employees, ages of employees, turnover rates.
? Do your research. Educate small business owners about the different retirement products available and their tax implications. (You may also want to stress the Transamerica survey finding that workers are more concerned about requirement plans than employers think.)
? Contact several plan providers. It?s best to shop around to identify the provider that will best satisfy your clients? needs.
? Consider bundling services. Recommend that clients contact their insurance providers or payroll services regarding pension plans. Bundling these services together may result in dramatic cost savings.
? Ask questions. CPAs can play a key role as liaisons between their clients and pension plan providers. Small business owners are better equipped to select a plan when they understand each one?s unique features, and the provider?s willingness and ability to answer questions provides some insight into their future working relationship.