401k Plan Tax Relief Exception Builds Employee Loyalty
401k Plan tax relief exception processing built a strong bond among employees impacted by Hurricane Maria. Fred Barstein, Founder and CEO of The Plan Sponsor University (TPSU) interviewed Hubba, 401k Plan Administrator for a pharmaceutical firm which maintains a satellite workforce in Puerto Rico. After the devastation caused by the natural disaster, the company provided 401k plan tax relief exception processing. This enabled 401k plan participants to take care of immediate needs that were more pressing than the long-term needs of retirement.
Full Transcript Here
Fred Barstein at the University of Memphis, completed a TPSU program and I am here with Hubba. Welcome Hubba.
Okay if we ask you a few questions?
But please tell the audience a little bit about yourself, your organization, and your role.
Sure. My name is Hubba Ansari. I work at a, you know, outsourcing pharmaceutical company and we have about 1,800 participants in our plan currently. We actually went through an acquisition recently and we have about 400 plus employees coming onto our plan, so we have about 2,200 … North of 2,200 now in our plan.
And your role is?
I’m an HR administrator.
Very good. So one of the things you mentioned that actually was in your group is you have employees in Puerto Rico, which is still going through hardship.
That’s correct. Yes. Uh-huh (affirmative).
And you adjusted the 401k plan. So what did you do?
Correct. So we have the 1165u plan, which I guess it’s what it’s referred to as down at the island. So when the Hurricane Maria hit the island it was just a very devastating situation, and at the time I think it was important for us as the plan sponsor to really cater to our employees’ situations in their time of distress.
So what we did was offered a hardship withdrawal, where they were able to withdraw up to $10,000 without having to pay a penalty fee. So we honored that and administered that about eight to nine months ongoing. Yeah.
And what was the result? Did people … Did you get feedback on that?
Oh yeah. Definitely. I mean it was significant. It was very profound how, you know, I think certain employees were in their reasoning … You know, I wouldn’t go into the specifics, but really were withdrawing money for certain … Like really to get their apartment or their living conditions better, or to get a generator or things like that, because there wasn’t any power down at the island, so things of that nature, so it was very impactful.
And, you know, we’re at a low unemployment rate, right? So getting good people is not easy.
Absolutely. Standing by your employees during times of hardship as employer or plan sponsor in their best interest is not only your fiduciary responsibility, but I think your … You know, you should do what’s the right thing to do I think.
Right. It shows you care.
Yeah. Absolutely. Yeah. It’s what makes you want to work for that organization.
Very good. Well thanks for your time today.
Thank you. Thank you very much. It was a pleasure being here and very insightful, very enrichful experience and I’m glad I could be a part of it.
Well, keep coming back.
Thank you. Will do.
Thank you. Thanks for watching 401k TV. Stayed tuned.