What are the specific needs of your employees, such as child care, health and dental coverage, or a pension plan? How extensive will coverage be and what eligibility requirements will apply? Will employees contribute to the plan or will you pay for the entire package?
In addition to the price of the benefit package, you must estimate:
These costs will be affected by plan design, management, and the business's administrative practices.
Will you or your employees benefit from any tax advantages? Are there similar plans with greater tax advantages you should consider? Will you be able to adapt to future changes in the tax code?
In 1974, the Employee Retirement Security Act (ERISA) required employers who provide pension plans to meet certain minimum standards. From 1981 to 1986, five major tax laws further specified the legal requirements for providing retirement benefits to employees. The Tax Reform Act of 1986 included new "non-discrimination" rules on health and life insurance plans governed by Section 89 of the IRS Code. In November 1989, these changes to Section 89 were repealed because of the great burden it would have placed on employers to prove their benefit plan did not discriminate.