Good pre-employment attitude and personality assessments have built in “lie-scales” to detect when applicants fail to answer questions with candor. Modern drug testing technology can identify when applicants attempt to adulterate samples. Hiring without these steps is equivalent of agreeing to play Russian Roulette without checking all chambers of weapon first.

Copyright 2001 by Mason Duchatschek

The SIMPLE plan will be very helpful for small firms that want a retirement plan with minimum hassle or and minimum cost. In recent years a number of companies with less than 100 employees have started traditional 401(k) plans but then found that they did not get results they expected from plan. These firms are statistically too small to support a 401(k) plan with their cumbersome set of rules and restrictions. In addition, 401(k) plan administrative costs often ran much higher than employer originally expected. Many of these companies now unhappy with cost or service with their current 401(k) plans are expected to switch to new SIMPLE plan.

Another advantage is that SIMPLE plans can be funded with no-load mutual funds chosen by investor that result in significant saving to employees over time. In contrast, most 401(k) plans use heavily commissioned investments or charge substantial administration fees.

SIMPLE plans can be an effective tax saving tool for business owners. A high-income business owner could save up to $5,500 in taxes in a single year on contributions of up to $13,000 in his own account without making contributions to other employee’s accounts if other employees decline to participate. (Typical tax savings are $2,000 per year for a middle-income participant). This tax benefit favoring owner is not possible with other types of retirement plans available today. The employer’s cost for matching contributions in a SIMPLE plan currently averages about $600 per year per employee because not all of employees will participate in plan. This is far less than cost of most 401(k) or SEP plans.

If an employee contributes only $25 per week (with contributions matched by employer) account will grow to provide a retirement income of about $125 per week after just 10 years of contributions.