Pulse - October 2021 - 17

TOOLS FOR SUCCESS
401(k) match program is strong, it will
be something they would lose out on
if they switch jobs. In fact, 75 percent
of new hires at a company offering
a 401(k) say the retirement plan
provides a compelling reason to stay,
according to Willis Tower Watson's
survey2
.
While individual raises, bonuses,
and promotions may benefit some, a
401(k) plan may be easier and more
equitable to apply to your whole
company. Employees who feel their
employer is invested in them are
more likely to be engaged in their
workplace and stay with the company
longer, reducing the high cost of
employee turnover.
Top 401(k)s for Top Talent:
How to Ensure You're Providing
the Best 401(k)
Not all 401(k) plans are created equally,
and plans can vary drastically. To help
you find the best 401(k) plan for candidates
and current employees, these are the
options your 401(k) plan should offer:
Immediate eligibility:
With immediate eligibility, employees
have the option to sign up and contribute
to their account right away. This is
extremely important for employees, since
they'll be receiving the full value of their
benefit right away, as opposed to waiting
a set amount of time. It can also improve
participation, since employees are more
likely to sign up when they first join the
company and are onboarding.
Low-cost index funds:
By offering low-fee options, employees
can keep more of their earnings and
not have fees eat away at their retirement
savings. To put it into perspective, even
a 1% difference in fees can add up to
hundreds of thousands of dollars in lost
retirement savings.
Employer match or contribution.
By offering a generous employer match
or contribution, you will most likely boost
employee participation and increase your
employees' retirement savings, giving
your plan an even more competitive edge.
401(k) matches are essentially financial
compensation - with the added benefit of
being tax-deferred - and many employees
would consider this similar to a salary
bump or bonus.
What is considered a good 401(k)
match? According to the National Compensation
Survey3
, 41 percent of employers
match a percentage of employee
contributions between 0 to 6 percent,
while 10 percent match a percentage of
employee contributions at 6 percent or
more. According to the Bureau of Labor
Statistics, the average 401(k) match is 3.5
percent of compensation.
The bottom line is that your company's
success is tied directly to the quality of its
workforce. Giving your employees topnotch,
thoughtful benefits, like a 401(k), is
a great way to ensure they're happy, remain
loyal to your company, and are engaged in
the company's success.
Now is a great time to reevaluate your
401(k) as we approach business planning
and budgeting for next year. Connect with
your teams and 401(k) vendor to explore
improvements to your plan or start a conversation
about getting a new plan launched
at the beginning of the next year. P
Written by Roger Lee. Article shared by Darby
Affeldt, DVM, RICP, Financial Advisor and Associate
Partner, North Star Resource Group and
Principal Financial Group. For more information
contact Darby at: Darby.Affeldt@northstarfiancial.
com, www.DarbyAffeldt.com. Or to explore which
retirement plan options could be a fit for your
practice, visit the PSIvet Retirement Plan Portal:
Retirement Plan Portal.
Sources:
https://b2b-assets.glassdoor.com/benefits-employeeswant-most-2017.pdf
https://www.willistowerswatson.com/en-US
https://www.bls.gov/ncs/
PULSE
OCTOBER
2021
17
http://www.DarbyAffeldt.com https://b2b-assets.glassdoor.com/benefits-employees-want-most-2017.pdf https://www.willistowerswatson.com/en-US https://www.bls.gov/ncs/
Pulse - October 2021

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