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Employee Retirement Benefits

As a National Household Employer Association member, you can establish a SIMPLE 401(k) plan to provide your household employees with retirement benefits. This is a plan exclusive to household employers that you will not find anywhere else.

The NHEA SIMPLE 401(k) Plan not only gives you a recruiting and retention advantage over other families without retirement options, but it also helps your employee build an excellent source of retirement income and experience the benefits of tax-deferred growth.

Featured and Benefits of the NHEA Retirement Plan

Designed for household employers

A SIMPLE 401(k) plan is perfect for families with household help. Domestic workers – like nannies, housekeepers, senior caregivers, and others – provide personal services to the family and can not be added to a retirement plan offered to business employees through their company or sole proprietorship.

Tax Savings

Household employees will benefit from pre-tax savings via payroll deferral of up to $16,500; those 50+ years old can defer another $3,500 as a catch-up contribution (2025 contribution rates).

Roth Deferrals

Roth 401(k) deferrals are allowed. Employees will pay income taxes on the deferred contribution. In most cases, however, the earnings are not subject to income taxes upon distribution.

Flexibility

Household employees have the option to modify deferral amounts.

Employer Contributions

The employer must make mandatory contributions on a dollar-for-dollar match basis of up to three percent of the employee’s gross pay, which can be used to reward and retain valuable household workers.

Vesting

Money contributed to an account by an employer and their worker is always 100 percent vested. Vesting refers to an employee’s “ownership” of their plan benefits.

Self-direction of investments

Household employees can self-direct their investments from a list of monitored, low-cost mutual funds. There are no restrictions on making changes and no commissions are assessed. Advisors are available to help counsel employees and understand investment options in the plan that may be best suited for them.

Online enrollment

Once a household employer adopts a plan, their worker can enroll online, choosing the amount they wish to defer and how they would like to invest their contributions.

Employee Support

Household employees have access to fiduciary financial advisors who can provide them with professional fund management and one-on-one advice. A fiduciary is an individual who will act in the employee’s best interest by buying and selling investments that are the best fit for the employee and avoiding conflicts of interest.

Transferability

If the household employee changes families and their new family uses GTM Payroll Services, that family can adopt the plan and continue 401(k) contributions OR the employee can roll their money into another qualified retirement plan or individual retirement account (IRA). Employees will always be 100 percent vested in their rollover account. Assistance is available for any employee who wishes to roll over their account.

More Member Benefits

Being a household employer, and all that it involves to set up and manage the employment of one or many professionals in your own home is a complex and time-consuming process.

As an NHEA member, you will also automatically receive:

• A 25% member discount on Household HR documents designed specifically for household employers.
• A free (digital) copy of the book “How to Hire a Nanny: a Household HR Handbook” – the definitive guide to hiring and managing household workers, written by NHEA’s founder Guy Maddalone.

In order to provide the NHEA retirement plan for your employees, you need to be a client of our approved payroll provider, GTM Payroll Services.