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>401k are extremely easy to administer, or at least much, much easier than defined benefit pensions. Definitely so! They require filing the Form 5500 annually

>401k are extremely easy to administer, or at least much, much easier than defined benefit pensions. Definitely so! They require filing the Form 5500 annually with severe penalties for not doing so, and if safe harbor criteria aren't met, I believe an actuary may be required. I helped setup a small business 401k a few years ago and found Human Interest to be about the cheapest option overall at {employer: $120/month + $4/user/month} + {employee: 0.5% AUM management fee + fund expense ratios (good funds available, coming in around 0.07%.)}. The direct employer cost is still $1,500/year for 2 employees before any match. Simple IRA's are an option, but have much lower contribution limits. >However it would be ideal if the US government stopped giving large companies subsidies (via the 401k tax deduction) Do you mean the administrative expenses and employer contributions being tax deductible, or a more specific nuance to the tax code? The intent of the 401k safe harbor rules is to ensure they don't only benefit the highest compensated employees. For someone earning 30k/year, saving for the future is a legitimately tough proposition. I haven't fully fleshed out how I'd best handle ensuring all groups can reasonably be able to retire.

lotsofpulp 7y ago
I mean the only compensation between an employer and employee should be cash (withheld at whatever taxes according to income tax rates). If the government wants to then incentivize retirement or healthcare savings via tax deductions, it should offer that to everyone, regardless of employer or where the income came from. However, I'm also against using tax deductions as it allows for price obfuscation. I would be okay with government providing incentives such as matching contributions. That would allow for clear accounting of government expenditures.

lotsofpulp 7y ago

I mean the only compensation between an employer and employee should be cash (withheld at whatever taxes according to income tax rates). If the government wants to then incentivize retirement or healthcare savings via tax deductions, it should offer that to everyone, regardless of employer or where the income came from. However, I'm also against using tax deductions as it allows for price obfuscation. I would be okay with government providing incentives such as matching contributions. That would allow for clear accounting of government expenditures.