International Door & Operator Industry

MAY-JUN 2018

Garage door industry magazine for garage door dealers, garage door manufacturers, garage door distributors, garage door installers, loading docks, garage door operators and openers, gates, and tools for the door industry.

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Continued on page ## 54 International Door & Operator Industryâ„¢ If you want additional information about the advantages of the IDA Insurance Pro- gram, please contact Andrew Stergiou at 212-603-0321 (astergiou@alliant.com). Alliant Insurance Services, Inc. the consult- ing broker for the IDA Insurance Program, is one of the largest and most experienced insurance and surety bond brokerage firms in the country. ASSOCIATIONNEWS Nationally, the opt-out rate for 401(k) plans with automatic enrollment is less than 15 percent, according to the US Department of Labor. Employers should consider the default deferral percentage as well: while many plans automatically enroll employees at a 3% rate of deferral, this savings rate is unlikely to generate retirement savings to sustain an individual through a lengthy retirement. Many employers are implementing higher deferral rates for their automatic enrollment provisions, sometimes in conjunction with an automatic increase feature that raises the rate of deferral each year to bring employees to a rate of savings that will set them on a path to a sound retirement. Matching Contributions An employer match is a powerful incentive to encourage employees to save in a 401(k) plan. Given the long-term cost associated with employees who are not able to retire, some employers look at their 401(k) matching programs as an investment in the sustainability of their enterprises. A well-designed employer matching formula can encourage a greater level of participation. A match of 100% of the first 1% of an employee's deferrals creates the same maximum liability as a match of 25% of the first 4% of an employee's deferrals, but the latter matching formula is likely to spur a greater level of savings on the part of plan participants. As an added benefit, matching contributions may provide a valuable tax deduction for employers. Smaller businesses might also consider including profit sharing provisions that provide the opportunity for greater tax savings and retirement accumulations for owners while offering a robust plan to their rank-and-file employees. An accountant or pension consultant may be able to provide plan design illustrations using new comparability or other formulas. Plan Fees Steep investment and administrative costs may deter some employees from taking full advantage of a 401(k) plan. It is important for employers to periodically review their 401(k) contracts and identify whether there are vendors available who may offer a plan at a lower cost to the plan participants. 401(k) fees are primarily a function of plan size and complexity, but an experienced retirement plan consultant may be able to identify the most cost effective vendors and service providers. All 401(k) service providers are now required to provide detailed fee disclosures to plan sponsors. While these documents provide a great deal of information about the expenses associated with the plan, they may not provide the context that can be obtained by comparing one's 401(k) contract with others available in the marketplace, or by reviewing benchmarking data for other plans of similar size and complexity. Communication Once the 401(k) plan is established, the next challenge will be to educate employees about participating and investing. This process begins at orientation, but can continue with ongoing communication throughout a worker's employment. Employers who want to make retirement readiness a part of their workplace culture do not have to go it alone. Engaging a dedicated retirement plan specialist can help to make sure the plan is meeting its objectives, costs are reasonable, and design is effective. Ultimately, closing the retirement gaps in a company's workforce may benefit the bottom line. (Continued from page 52) A well-designed employer matching formula can encourage a greater level of participation. A match of 100% of the first 1% of an employee's deferrals creates the same maximum liability as a match of 25% of the first 4% of an employee's deferrals, but the latter matching formula is likely to spur a greater level of savings on the part of plan participants. !

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