Is Your Company’s 401(k) Plan Working the Way It Should?
This post was contributed by Jim Kyger, Assistant Vice President, Human Relations, Printing Industries of America. In this installment, Jim discusses the role of 401(k) plans in your business.
Two interesting studies were released in May analyzing various statistics of 401(k) plans in 2014. First, Financial Engines reported that as many as 25 percent of employees are not taking full advantage of their company’s match to the 401(k) plan. They calculated that these employees are, on average, missing out on $1,336 a year of “free” employer money. Calculated over 20 years, this equates to $42,855 (including investment gains).
Second, Aon Hewitt reported that 2014 average 401(k) balances increased by 10.2 percent ($100,320). Plus, Aon Hewitt found that 401(k) participation increased to 79 percent, the highest rate since the company began tracking in 2002.
On a side note, printers who won in PIA’s 2014 Best Workplace in the Americas program had an average employee contribution of 6.1 percent.
Tip: Want to get your 401(k) metrics up? Is your firm having trouble passing non-discrimination testing? Run an article in your company’s employee newsletter with your average and cumulative employer match “left on the table.” If your average employee 401(k) balance is not $100,000, then challenge your employees to do something about it—it’s their retirement after all. Plus, compare your participation rate to the national average (according to Aon Hewitt). When your employees retire, they will thank you.
For additional HR resources, news, and more, visit www.printing.org/hr.