marfinancial Oct 4, 2007 2:47 PM
My agency is a benefits agency with over 25 years experience in designing, shopping, implementing, and communicating employee benefits plans, including voluntary worksite marketed suppliment plans and retirement plans, The approach suggested by this author is deceptive and unethical. The employer does not actually reduce their retirement plan expenses by implementing a section 125 pre tax plan. Nor do the retirement plan participants enjoy any reduction in the plan expenses or loads that are charged against thier earnings.
What you might say to an employer is: "You can save employer taxes FUTA, FICA, and st unemployment tax that can offset your assessed retirement plan administration costs by allowing your employees to pre tax their contributions to eligible insurance plans that are written in a Section 125 plan."
We have enough problems with agents who mislead clients and their employees, and misstate rules, laws, regulations, and plan provisions, without this kind of slipshod marketing.