Employer Match: Fostering Financial Security & Employee Loyalty

 

Employer Match: Fostering Financial Security & Employee Loyalty

Employers play a crucial role in fostering a positive work environment and supporting their employees’ overall well-being.  One key aspect of this is investing in a quality retirement plan.  By offering a competitive retirement plan with a match, employers demonstrate their commitment to their employees’ financial security and provide a powerful incentive for employee retention. Research supports this notion, with studies showing that employees are more motivated and productive when they perceive that their employers are actively investing in their mental, emotional, and financial well-being.  Financial stress can significantly impact an employee’s performance, which is why employers should take the initiative to alleviate these concerns by providing a quality retirement plan.

According to the Plan Sponsor Council of America, plans with an employer match have an average participation rate of 85%, compared to 57% for plans without a match. Additionally, the Transamerica Center for Retirement Studies found that 77% of workers consider retirement benefits an essential factor in their job decision-making process. By prioritizing a quality retirement plan and offering an employer match, employers create a positive and supportive environment that promotes employee engagement, financial well-being, and long-term loyalty.

At the conclusion of The Plan Sponsor University (TPSU) Fiduciary Education Program held in Villanova, Pennsylvania at Villanova University, Founder and CEO Fred Barstein spoke with Plan Sponsor Kim, who works as the Director of Finance for a manufacturing company that employs 180 people.  Kim highlighted the ongoing efforts to raise awareness about the significant value of their company’s generous 10% contribution. However, some employees may not fully realize the extent of this valuable benefit.

Read the Full Transcript Here:

Fred Barstein:

Fred Barstein with 401kTV at Villanova University where we just completed a TPSU program. And I’m so happy to be here with Kim. Welcome Kim.

Kim:

Thank you.

Fred Barstein:

Kim attended our program. Okay if we ask you a few questions?

Kim:

Absolutely.

Fred Barstein:

Thank you. But before we do, tell us your first name, size of your organization and your role there.

Kim:

My name is Kim, and I work for a manufacturing company that employs 180 people, and my role there is director of finance and information technology.

Fred Barstein:

Great. So during the program, you talked about your company that has a generous match.

Kim:

Yes.

Fred Barstein:

And which is not elective plus profit sharing.

Kim:

That’s correct.

Fred Barstein:

We won’t say the name of your company because you’ll be flooded with applications. It’s 10% in total.

Kim:

Yes. There’s a 3% automatic contribution for anyone who’s eligible to be in the plan, regardless if they’re contributing or not. And then we have a very generous profit sharing plan, which is typically around 7% a year. So that’s the 10% contribution the employees are receiving.

Fred Barstein:

And so what was the concern you had about that?

Kim:

My concern is that a lot of the employees don’t realize or value that 10% contribution into their plan. We’ve had so many employees leave the company because they found another job that’s offering pennies more on the dollar, and they’re not considering the value of that 10% contribution.

Fred Barstein:

So you want to show the full benefit value, not just the salary. And part of that may have to do with, well, that’s going to somebody else, my future self, and I don’t care about that future self.

Kim:

Correct. And I think the concept of the future self was a really, at least it was eye-opening for me. So I think that concept is a really good one to spread.

Fred Barstein:

So we got to let them know that.

Kim:

And I’ve got to spread the word. Yeah.

Fred Barstein:

Very good. So final question, just a couple of things you may want to try to implement other than the future self concept.

Kim:

I like the auto escalate concept. I think that’s a really good concept and people don’t really think about that. I know it’s something I’m not currently doing. I had kind of in my younger years, every time I got a raise, I’d put that amount of money into a separate savings account and I got away from that practice. But it was a really good one, and it’s a good way to accumulate wealth relatively quickly without even missing… Feel like you’re losing out on anything.

Fred Barstein:

Good. Well thanks for your time today.

Kim:

Thank you so much.

Fred Barstein:

Thank you for attending TPSU. Hopefully we’ll see you in six months. And thank you for watching 401kTV.

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