Owner Ted Kesten says he already had a traditional pension plan. More than 100 employees have since signed up. What's more, the money goes into a tax-deferred account, meaning they pay no tax on their gains until they make a withdrawal. Employees are immediately vested for their own contributions, and their money can go into a variety of investments, including mutual funds. About three-quarters of employers match some or all of their employees' contributions, making the account even more attractive to your workers.
Employers make out pretty well, too.
Although you can match employee contributions, you don't have to. In addition, you can set vesting schedules for your share of contributions for as short as you like or as long as five years. That's great for employers, because it sharply limits your liability if something goes wrong in the retirement portfolio. In effect, it means the employee bears the consequences of bad investing decisions instead of you.