Any foundation that compensates any individuals for their services, whether those individuals are full-time employees, part-timers, or board members, can set up a pension plan for those individuals. Of course, tax-exempt organizations don’t gain the same tax benefits from pension contributions that for-profit organizations achieve. A pension plan, though, is a common element of compensation packages because retirement planning is a vital part of employees’ future financial health.
Because of the multitude of plan options available and the degree of flexibility that many of them allow, even small organizations usually can find a pension plan that suits them. Foundations can set up plans that keep annual paperwork to a minimum and provide considerably leeway in deciding what amount of money (if any) to contribute to employees’ pension accounts. Even when employee contributions from payroll deductions constitute most or all the funds going into the retirement plan, the existence of a pension plan can make a major contribution to employee morale and loyalty, as well as financial well-being. Keep reading >>