Boca Human Resource Company Offering New 401(k) Plan
As Published in the May 2006, Issue of the Boca Raton News
Oasis Outsourcing’s new Roth 401(k) retirement plan for employees, according to company manager Shannon O’Shaughnessy, “is the best thing to happen to 401(k) in years.”
The plan is currently being offered by West Palm Beach-based Oasis—a nationwide employee resource provider with offices in Boca Raton—to its business clients who represent approximately 60,000 employees.
Similar to conventional 401(k) plans, the Roth 401(k) allows employees to take a percentage of salary earnings and put it away into a separate account that grows tax-free. The Roth 401(k) differs from the original plan, though, by making the employee contributions after taxes instead of beforehand.
“What this does is, for the most part, give retiring employees with a Roth 401(k) the opportunity to not have any taxes placed on the fund when it is withdrawn,” O’Shaughnessy said.
In order to ensure the full amount of the fund during withdrawal, the employee must be 59 or over and have held the account for five years.
The concept of the Roth 401(k) came out of the Economic Growth and Tax Relief Reconciliation Act of 2001, which lowered tax rates and simplified individual retirement accounts.
Oasis began including the Roth 401(k) in its employee benefit packages shortly after the plan took effect across the country January 1.
O’Shaughnessy pointed out that the Roth 401(k) adheres closely to Oasis’ Roth IRA post-tax retirement plan.
“The big difference is that there are no contribution limits to a Roth 401(k), unlike the IRA,” she said. “Therefore, it’s great for people who earn larger incomes.”
Money submitted to Roth IRAs this year is limited to $4,000, or $5,000 for employees 50 and older.
According to smartmoney.com, the Roth 401(k) plan is strongly advised for people who expect tax rates to be the same or higher in retirement than they are now. Young workers expecting to have salaries rise in the future are also urged to consider the plan.
Among the list of benefits offered by Oasis, the Roth 401(k) has been of the most eagerly requested.
“A lot of our clients had been constantly asking us in the past when we would get the plan,” O’Shaughnessy said. “They’re very happy it’s available.”
The company’s other employee benefits are health insurance, including medical and dental, health savings accounts (HSAs), flexible spending accounts (FSAs), and short and long-term disability insurance.
“Providing a full benefits package, including the Roth 401(k) plan, assists our clients in recruiting and retaining top quality employees,” said Mark Perlberg, CEO of Oasis.
