Why should you, the employer, have a pension plan?

Pension Plans, for both you and your employees, are a way to provide for future income in your retirement years. Not only do they provide for future benefits, but immediate financial advantages are gained. For example, for you as the employer, contributions to a qualified plan are tax deductible (an immediate business expense) reducing current taxes, and the income earned on plan investments is also tax deferred. The following table provides an example of the savings that can be had with the adoption of a pension plan.

This example shows that the savings after only one year is $4,320 ($10,500 - $6,180).