Certain non-profit organizations, schools or hospitals, are eligible to establish a special employee benefit program that is highly visible, but with a low cost. Your employees elect the percentage of salary they would like to defer. You contribute this amount to an investment under the employee's name. The employees do not pay current taxes on money contributed to the plan.
Values accumulate tax-deferred.
The distribution to the employee may be at a time when the individual is in a lower tax bracket. The plan is easy to understand and should improve employee morale, which in turn may result in a lower rate of employee turnover. Employer financial obligations can be controlled by choosing to have all contributions paid by the employee. Your only expense will be the internal administration of reducing each employee's salary and drawing a check for the TSA contribution. There are a number of advantages.