Employer Contribution to 401k Plans Comes in Many Forms
Employer contribution to 401k plans come in many forms and sizes. How a retirement plan defines compensation will determine if an employer contribution to 401k plan can occur. At the end of a Plan Sponsor University (TPSU) Program at the University of Southern California, Fred Barstein, Founder and CEO of TPSU, interviewed Ms. Marie Morgan, the Plan Administrator of the retirement plan at her firm. Ms. Morgan’s organization consists of 80 employees who concentrate on creative assets within the video gaming industry. She describes the unique nature of the service-based bonus which her company makes to employees within their 401k plan.
Full Transcript Here
This is Fred Barstein with 401K TV, and I’m here with Marie. Welcome Marie.
Hi.
And Marie just finished TPSU Program at USC. And we wanted to ask her a few questions. Okay if we ask you a few questions?
You may.
So before we do, just give us a little bit about yourself and your role in your company.
My name is Marie, and I am with a company of 80 people. We’re located in Burbank, and we work in the creative advertising field in video games.
Very good. So one of the things that you have is a very unique sort of match, or bonus program. Can you tell us about that?
Yes, so we do a safe harbor that everybody who’s not highly compensated gets the 3% safe harbor. And then after 10 years we give them a $10,000 increase into their 401K.
You give a $10,000 bonus of money.
Yeah, bonus.
So why did you guys do that?
Well, both the owners came up with this concept about four years ago.
Okay.
And they just felt like, you know, actually it was at our 10 year anniversary. And they just felt that, you know, there was a lot of people, there were about six people that had been there for 10 years and they felt like it was a really great contribution. And they wanted to sort of from that point forward, to start giving that out to all the employees who had been there for 10 or more years.
So how’s it working?
It’s going great. It’s really good. I think it makes people feel very accomplished. And it just makes them feel great, and you know they remember when they hit their 10 year mark. They ask me.
They look forward to it.
Yes.
Right, and you’re in a competitive field, right?
Yes.
For employees, so that’ll help-
Yes.
-to do that. So final question, a couple things you learned today? I know we talked about the eligibility issues.
Yes, so the eligibility of learning about how they can contribute right off the bat, as well as continuing the eligibility a year after for the safe harbor, and for any vesting. But also I really enjoyed the emergency fund, and learning about how we can save, utilizing that as well, for like taking some of the percentages to help create an emergency fund for our employees.
Great, great. Well thanks for your time today.
Thank you.
And thank you for watching 401K TV.
