How do I keep key employees without raising salaries?
Short answerA business-funded retirement benefit can reward years of service. The vesting schedule determines what employees keep when they leave. Review the staff cost and your own benefit together.
- What you get
- A plain-language fit review built around your age, income, and team.
- What happens next
- Start with your contact details. We will ask for the plan details needed to review the fit.
How a retirement benefit supports retention
Business contribution
The employer funds a benefit for eligible employees.
Vesting over service
Ownership follows the schedule in the plan document.
A benefit they can keep
Employees retain the vested portion when they leave.
A benefit that rewards the people who stay
Employees receive a real pension contribution that vests over time. Leave early and the unvested balance returns to the plan; stay, and it is all theirs. It is a benefit most competitors cannot match.
Vesting turns the benefit into a reason to stay
Contributions can vest over a schedule of up to six years, or a shorter cliff. Every year of service moves more of the balance into the employee's own column, which is exactly the opposite of a raise, which is theirs the day it is paid.
Not everyone has to get the same amount
Plans can set age and service minimums for eligibility, and class-based allocations can give different groups, such as owners, associates and staff, different levels of benefit, all inside IRS nondiscrimination testing on your real census.
Money that leaves comes back
Unvested money left behind by early departures returns to the plan and offsets future contributions, so turnover among people who were not going to stay does not cost you the full benefit.
Why it beats a raise
A raise is permanent, is taxed to the employee as ordinary income, and is matched by the next competing offer. A plan contribution is a deductible business expense, grows tax-deferred for the employee, and is only fully theirs after they have stayed.
Your own benefit, in the same plan
The same plan that keeps your key people is designed around the owner. Our actuary weights the design to owners and key people and sets a compliant, vesting benefit for staff.
One deductible contribution, several jobs
The business contributes, and eligible contributions are generally deductible within applicable compensation and plan limits. Inside the plan, dollars fund retirement accounts for you and your team, and, if you choose, a life insurance policy.
Owners first, by design
Profit you contribute to the plan is generally deductible within the limits that apply, grows tax-deferred, and is allocated first to the people who built the company. Owners shelter income and build wealth; employees earn a pension benefit that grows the longer they stay.
What it costs, honestly
Four things, none of them hidden.
A contribution for staff each year
Set by the design as a slice of pay for each eligible class. The staff contribution is a deductible business expense, and forfeitures from employees who leave before vesting come back to the plan and offset future contributions.
Administration fees
Flat-rate fees that depend on the design and the number of participants, quoted up front before you commit.
A commitment you size yourself
Designs pair a discretionary profit-sharing piece with a defined pension piece, so part of the contribution flexes with the year's results and part is a commitment. The actuary sizes both to profit you can count on.
A little of your time
An annual census and signatures. Plan documents, testing, participant statements and government filings are handled as one engagement.
The four questions every employer asks first
What will it cost to fund my employees?
A business contribution, generally deductible within plan and compensation limits, that the actuary sets for each class of employee on your real census. Key people can receive more than staff and everyone's benefit vests on a schedule, so the cost is weighted toward the people you most want to keep.
Who does the administration, and what do I have to do?
Plan document, annual testing, participant statements and government filings are handled as one engagement. Your part is an annual census and signatures.
How flexible is it if cash flow changes from year to year?
The profit-sharing piece is discretionary and follows the year's results; the pension piece is a commitment sized to profit you can count on. Contributions are decided plan year by plan year within the actuary's funding range, not added as a fixed monthly payroll line.
Is a cash balance or life-insurance-in-plan design right for a business like mine?
It fits an employer with a handful of people whose departure would hurt, stable profit to fund from, and an owner who wants a benefit for themselves too. It fits less well when turnover is high across the whole team or profit swings sharply from year to year.
See how these choices apply to your business.
Request My Plan ReviewQuestions people ask next
What benefits keep employees from leaving a small business?
Benefits that are worth more the longer someone stays. A retirement contribution on a vesting schedule does that structurally: an employee who leaves early forfeits the unvested balance, and one who stays keeps all of it. Health coverage and flexibility matter too, but they reset every year; a vesting pension compounds tenure.
Is a retirement plan cheaper than giving raises?
It is a different kind of cost. A raise is permanent, taxed to the employee as ordinary income, and repeated every future year. A plan contribution is a deductible business expense the design sizes for each class of employee, and part of what you contribute for people who leave early comes back to the plan. Whether it costs less in your case depends on your payroll, which is what the illustration shows.
Can I give key employees a bigger retirement benefit than everyone else?
Yes, within limits the actuary designs around. Class-based allocations can give different groups, such as owners, associates and staff, different levels of benefit, all inside IRS nondiscrimination testing on your real census. The plan cannot leave staff out entirely, but it does not have to treat everyone the same.
Do employees have to stay a certain number of years to keep the benefit?
Employer contributions vest on the schedule the plan document sets, which can run up to six years or use a shorter cliff. The schedule is chosen at design time to match how long you want people to stay, and the unvested part of anyone who leaves early returns to the plan.
Request My Plan Review
Share your contact details, then choose a consultation time. We will discuss your team, budget, and the information needed for a plan illustration. No obligation.
General information about how these plans work, not tax advice. Illustrations are hypothetical in nature and are not a guarantee of future results. Your own contribution depends on your age, income, and plan design, and should be confirmed by an actuary. Please consult an independent tax or financial advisor.