Why 125 Plan Structures Are Gaining Momentum Among High-Level Decision Makers
With the ever-changing landscape of benefits for employees, top-level managers are always looking for ways to balance efficiency in finances in conjunction with satisfaction of employees. One option that has gained increasing interest is the use of 125 plans . Popular for their flexibility as well as tax benefits, these plans are rapidly being used as a strategy tool by businesses looking to boost the benefits of their plans while ensuring cost-effectiveness. What is the reason for these plans becoming popular among HR and executive leaders? Let's delve deeper. Understanding 125 Plans The 125-plan, also called cafeteria plans, permits members to select among a variety of pre-tax benefits. Contrary to conventional benefit plans they offer freedom, as they allow employees to use the pre-tax profits to specific eligible benefits. This makes the 125 plan especially appealing to high-level executives who want both the financial efficiencies and also a way to give employees a choice wi...