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Chapter 21. No 401(k)? No Problem! > Not a 401(k) in Sight - Pg. 209

No 401(k)? No Problem! 209 Not a 401(k) in Sight What can you do if you arrive at work the first day and discover that there is no retirement plan? Not very much the first day or even week. You need to see where you fit in before you start to rock the boat. Most of the hiring today is being done at the newer small companies because that's where the economic growth is right now. Most small companies don't and can't offer their employees many benefits beyond medical insurance. Setting up a plan and maintaining it can be expensive, and it can be time-consuming. Small companies can't afford the manpower hours needed for this project. So if you're determined, carry on. Approach the boss, the benefits person, or the human resources manager. Talk to the other em- ployees and see what they would like. A united front is far better than being on the firing line alone. Tell them what you know about retirement plans, and learn what they want or need. Then write up a formal proposal and present it to the powers that be. Get some other employees to co-sign the memo. You understand the KISS principle: Keep It Simple, Stupid. And you don't want to take on an adversarial role with your brand-new boss. She may not appreciate it. Make employee retention your primary issue. Obviously, retirement plans are just one way to keep quality people. Explain how it is much cheaper for a company to keep people, even if it has to offer benefits to keep them, than it is to hire new people and train them. This is a good argument to begin with because you need to appeal to the bottom line--the company's bottom line. Studies have shown that employees are more loyal to companies if the companies show concern for their well-being and that of their families. The argument that you'll get is that it's too time-con- suming or too expensive. Then you'll need to show how it can be even more expensive and time- consuming to recruit new employees. You may have to volunteer along with some of other employees to get the ball rolling here. Volunteer to carry out a company-wide survey to see what the other employees need. Next, show the boss how she can benefit from a retirement plan as well. The fact is, she can start to acquire retirement assets of her own right along with the employees, and if the boss matches some percent of employee contributions, the business gets a deduction. Beginning in 2002, the IRS also provides another tasty carrot for small employers: a tax credit to help cover the administrative and communication costs of starting a new plan. Our Advice Appeal to your boss by using the bottom-line argument: A retirement plan will actually improve the bottom line by retaining employees, and it offers the company a deduction as well. If the boss is happy and the employees are happy, everyone wins, and you can't beat a win-win situation for success. Read on to learn about the plans small companies can offer their employees.