Mason Hoover, general manager at Empire Heating and Air Conditioning in Decatur, Georgia, said offering a retirement plan has been incredibly valuable for the company.  

“Not only does it help us get more hits when we have job openings, as opposed to before, but it also shows which technicians are looking towards the future and will likely be around long-term,” he said.  

A strong benefits plan creates peace of mind and is an important aspect of employee well-being, allowing workers to focus on their careers and the business at hand — which in turn allows business owners the reciprocal benefits of a committed team.  

Patrick Lange, president of Business Modification Group, an HVAC business brokerage based in Madison, Florida, said long-term benefits often lead to loyalty.  

LONG-TERM LOYALTY: Patrick Lange, president of Business Modification Group, said long-term benefits lead to loyalty. (Courtesy of Business Modification Group.)

“If you are in a position to help your employees achieve their long-term goals, we have found that they are typically more loyal to the business,” Lange said.  

Requested Or Required, Retirement Plans Make Sense  

In many states, employers are now required to provide access to a retirement plan. The Air Conditioning Contractors of America recently reported on the growing number of states that require private-sector employers to automatically enroll workers in a state-facilitated retirement savings account.  

California, Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, New Jersey, New York, Oregon, Vermont, and Virginia already have mandated programs, with more states likely to follow.  

With costs top of mind — including activation fees and quarterly administrative expenses — business owners still have plenty of choices to implement a plan that serves both the company and its employees.   

The best place to start is with a clear view of internal operations and resources.  

“I think the first step is talking with their accountant and financial advisors and learning what options exist. So many owners do not even know what is available or what the true costs can be, so I think the first step is education,” said Lange.  

HVACR contractors of all sizes have options. Plans can seem expensive or time-consuming to manage, but technology and streamlined enrollment processes have made them less daunting than in the past.  

Types Of Retirement Savings Programs  

There are a wide variety of retirement plan options, from 401(k)s to SIMPLE IRAs and profit-sharing plans. The Internal Revenue Service offers a breakdown on its website.   

The most common plans are employer-sponsored and allow employees to manage their contribution levels.   

• 401(k): A qualified retirement plan that allows employees to contribute a portion of their wages to individual accounts.  

• SIMPLE 401(k): A subset of the 401(k) plan designed for small businesses with 100 or fewer employees.  

• Traditional IRA: A tax-advantaged personal savings plan where contributions may be tax-deductible.  

• Roth IRA: A tax-advantaged personal savings plan where contributions are not deductible, but qualified distributions may be tax-free.  

• Payroll Deduction IRA: An employer-facilitated plan allowing employees to contribute to a traditional or Roth IRA through payroll deductions.  

• SEP IRA: A Simplified Employee Pension plan funded by employer contributions.  

In states with mandated retirement offerings, state-facilitated plans can also be part of the mix.  

These government-sponsored programs are designed to provide access to retirement savings for employees when businesses do not offer a private plan. They typically use auto-IRA, marketplace, or multiple-employer plan models to enable automatic payroll contributions.  

With more states rolling out mandatory programs, HVACR contractors must decide whether to utilize a state-facilitated option or offer a private plan — a decision that is both personal and financial.  

Regardless of which, employees recognize the value.  

“In our experience, most of the employees that this is important to will greatly appreciate a private plan. Consulting with a retirement financial specialist is always the safest bet,” Hoover said. “If your state-facilitated plan is performing well, it may not be necessary to own a private plan.”   

Putting Action Into Practice  

Empire Heating and Air Conditioning offers both a Roth IRA and a 401(k). The privately owned company employs approximately two dozen people.  

“Contractors should first evaluate their business size, budget, and whether they want to include employees when choosing a retirement plan,” Hoover said. “Simpler options like SEP or SIMPLE IRAs require less administration, while 401(k)s offer more flexibility but involve greater complexity.  

“The right choice depends on balancing contribution goals, tax strategy, and whether the focus is personal savings or employee retention,” he said. “If retention is the goal, a matching percentage is a great way to invest in employees’ long-term futures.”  

Pleune Service Co., a 100% employee-owned mechanical contractor based in Grand Rapids, Michigan, offers a 401(k) plan and an employee stock ownership plan. The company employs approximately 125 people.  

“We have a 401(k) and an employee stock ownership plan. The 401(k) is a standard offering for a midsize business, while the ESOP was established at the discretion of the company’s founder, John Pleune,” said Ken Misiewicz, president and CEO.  

For contractors that don’t currently offer a retirement plan, Misiewicz also recommends consulting a professional.  

“There are so many options, all with different cost-benefit ratios,” he said. “Most importantly, it needs to be sustainable for the company and meaningful to the employees.”  

Where Affordability And Goals Meet  

The benefits that the program offers to attract and retain employees matters, but cost is always a consideration, regardless of business size.  

“Affordability is a big issue for smaller contractors; it can make sense to implement a SIMPLE IRA or something similar, which has an incredibly low cost and flexible contribution options,” Misiewicz said.   

“Large shops tend to look at retirement plans as a minimum requirement, [and so] typically offer a pension, 401(k), or other forms of retirement benefits.”   

Misiewicz said the key is balancing immediate compensation with long-term benefits — “pay me now and pay me later.”  

“Companies that have a genuine interest in taking care of their people provide adequate compensation in the short term as well as offer meaningful retirement plans that benefit the employees in retirement,” he said.  

Lange, who works with businesses of all sizes, offered a final perspective.  

“At the end of the day, it is cost,” Lange said. “Some plans are much more expensive and restrictive to manage.”  

Knowing the bandwidth for a business becomes critical.  

“I really feel it goes back to education about what is available … and then deciding what is the best fit for your business and employees,” he said.