Saving for retirement is on many employees’ minds and knowing that their employer is working to maximize their savings opportunities is critical. Contributing to an employee’s retirement doesn’t necessarily mean unsustainable costs for the organization.

Here are some basics about the alphabet soup of pensions:

401Ks — the basic plan where employees and employers can contribute to their retirement account. Different employer contribution percentages can be tailored to different groups of employees. There are maximum amounts that can be contributed annually ($22,500 for 2023) and the investment strategy is very flexible. For employees that are 50 years old plus, there is the ability to make annual catch up contributions to their 401K accounts of $7500 (for 2023). 

403Bs — this is also a plan whereby employees and employers contribute to an individual retirement account. However, all employees must be in the plan at specified start dates and the investments are limited to annuities or custodial accounts. The rules are challenging for organizations with high turnover and for contributions to highly compensated individuals’ accounts. These plans can be frozen and the newer more flexible 401k plans offered.

457 deferrals — an outgrowth of the 403B world whereby highly compensated individuals could have compensation deferred beyond what was contributed to their 403b plans. 

Profit Sharing Plans — these plans can coexist with 401k plans and allows separate rates of contributions for different groups of employees. Profit sharing plans can also be used by nonprofit organizations. The maximum amount of contributions (employer and employee) to the combined 401K and Profit Sharing accounts is $66,000 for 2023.  

Simple IRA annual deferrals and catch-up contributions — this is a 401K “light” plan for small businesses. Same concept as a 401K plan, simpler rules to follow. However, profit sharing plans cannot be added to a company’s Simple IRA plan. The contribution limits are also lower than in a traditional 401K plan. The limits for 2023 are $15,500 plus $3500 for qualifying catch-up contributions.

Compensation ceilings — professional advisors can help you set up your plans and coordinate with your payroll service so that the IRS’s maximum compensation ceilings and the maximum plan benefits are not exceeded. 

Another requirement — once the number of participants in these plans crosses the 100 threshold, audit requirements kick in.

Keep in mind that regardless of what the organization provides in the way of pension benefits, employees still have access to individual IRA plans and catch up contributions. These personal plans of an employee allow them to set aside more of their salary for retirement. The annual limits will be $6500 for 2023 with an ability to make $1000 catch up contributions. IRS tax rules that apply to the individuals and these funds are usually held by a bank or broker that adhere to the IRS reporting requirements.

Rick also offered some thoughts about tailoring health insurance plans. The same organization can offer two different health plans. They can offer plans which provide higher cost / coverage and lower cost / coverage plans or they can offer different types of plans to different groups of employees. Again, seek advice and maximize your opportunity to offer competitive benefits at costs the organization can afford.

Mary F. Foster is a member of the Hudson Valley Gateway Chamber of Commerce Nonprofit Committee; Vice President of the Peekskill Rotary Foundations Board; Treasurer of The Field Library Board; a founding member of HVH2O; and a retired partner from Deloitte, an accounting and consulting firm. 

specific topic, please contact Lucille Geraci-Miranda at lucille@gerandaprojects.com.

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At the heart of Meaningful Engagement is an environment of inclusion, collaboration and teamwork within a no-pressure, non-hierarchical structure, resulting in a keen sense of ownership, responsibility, and pride, and most of all, they have FUN!

Other major initiatives include Operation First Aid where participants create appreciation gifts for essential workers, and the Community Giving Cupboard which allows participants to put together food products to help the food insecure through local food pantry partners.

With a board of eight and a lean staff of three, their vision is clear: open the possibilities for adults of all abilities to create new ideas by providing a sanctuary for skill training, camaraderie, and a sense of belonging with the community at large. Their dedicated space in Somers offers plenty of room for inspiration, creativity, camaraderie, and fun. And when the participants need that quiet moment TEF has the space to chill out as well. 

Even through the pandemic, this budding organization stayed strong. But, like many other nonprofits, the pandemic brought about some challenges. “We had to switch our sessions from in-person to zoom which didn’t work as well for some participants, although almost everyone stayed with us. As participants were now working from home, we had to mail out supplies to them weekly in order for them to be able to create products,” said Founding Mother and Executive Director, Laurie Cameron. She continued, “Flexibility and creativity are key. We didn’t miss a beat when we switched to zoom and our focus is always on how we can create an environment that works for everyone, regardless of their challenges.”

Moving forward, I asked: Does your organization have a new way of working that has helped you to be more efficient and/or better organized? Lisa Jacoby, Director of Operations & Finance responded, “Some of our participants are helping us track inventory and deliveries, as well as organize supplies and products. In this way we are better able to manage the process and provide continuous offerings to our participants as well as achieve our initiative objectives.”

The Extended Family – they don’t see disabilities; they see exceptional individuals.

Lucille Geraci-Miranda, M.P.A. serves on the Board of the Hudson Valley Gateway Chamber Foundation, chairs the Chamber’s Nonprofit Committee and is President and Founder of Geranda Projects – Management Consulting for Nonprofits. Celebrating ten years of serving nonprofits, Geranda Projects is ready to offer its vast, integrated experience to help more nonprofits create a strong foundation and inspire them to reach their greatest potential, straight from the heart of their mission: www.gerandaprojects.com

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