A leading reason corporations and business owners offer a qualified retirement plan is to attract and retain sought-after talent. Yet, for a growing number, the plan has the opposite effect. This is because business owners and executives, who are generally among the most highly compensated employees - and often the key talent you're seeking to retain the most - face a dilemma in planning for retirement.

While business owners and other highly compensated employees (HCEs) may want to maximize contributions as they plan for their future needs, the cost of contributions to cover other eligible employees can make traditional 401(k) and similar retirement plans costly. Couple that with the potential for annual refunds to highly compensated employees, and the plan is hardly a tool for retaining these individuals.

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