Discover an efficient retirement plan in your plastics firm
In a year when employment was the focus of much discussion, plastics manufacturers accounted for more than a million jobs in 2020.
However, the results from the Manufacturing Institute and Deloitte suggest that a skills shortage of 2.4 million workers is on the horizon. When you know this, one thing becomes clear: the competition for recruiting and retaining skilled workers will intensify.
How can your company stand out from the rest?
A 401 (k) plan that meets your employees’ needs could be a cost-effective option. According to Glassdoor, nearly 80% of employees prefer new or additional benefits to a pay rise.
Ask yourself the following questions to help determine if your retirement plan is helping to attract and retain the best talent while achieving the fundamental goal of preparing your employees for retirement success.
Is your plan helping employees save properly for retirement?
The average age of employees in the plastics industry is 44.8 years. With more jobs to be filled in the future, your company needs a plan that takes into account the individual needs of each age group of employees.
An effective plan should support your efforts to increase the number of employees and generate savings. Plans can accomplish this by providing registration materials, ongoing training support for you and your employees, and investment advice services.
Use the following to gauge the effectiveness of the plan when reviewing your plan or exploring options in the industry. Makes it:
- Encourage employees to save by providing training and enrollment materials for retirement?
- Offer diversified investment opportunities from experienced asset managers?
- Do you suggest financial wellness tools to help participants meet their financial goals?
- Individual investment advice for plan participants?
- Do you offer additional plan functions such as Roth after-tax or profit sharing contributions?
Does your plan offer services to reduce your company’s liability?
This second question is a little more complex, but it can have a significant impact on the responsibility and risk of your business, also known as fiduciary responsibility.
By offering an employer-sponsored retirement plan, it is your responsibility to ensure that the plan serves the best interests of your plan participants and their beneficiaries. They are also responsible for choosing the investments made available to them.
Fortunately, some retirement plan providers can help ease that burden by connecting you to an independent service that can make the investment decisions for your business. The service then takes part or all of the responsibility for selecting and monitoring investment options under your company’s retirement plan. For many plastics companies, this means easier administration and additional legal protection against the growing number of 401 (k) disputes.
Additional features that an independent service can offer to reduce your company’s responsibility and legal liability include:
- Individual investment advice for all participants, regardless of age, income or wealth;
- Help your company understand how to meet its fiduciary obligations;
- Coverage to protect your business from lawsuits.
The final question isn’t which plan to choose, according to a survey by the Plan Sponsor Council of America less than a year away from thousands of companies cutting their 401 (k) contributions. That way, a vendor’s plan gets your employees on the move for retirement without adding more responsibility and risk to your business.
First, explore your available options, put your employees in the driver’s seat, and give them a clear roadmap for retirement.
About the author
Eric O’Donnell is the Director of Retirement Product Development for Sentry Insurance. Sentry provides insurance, retirement products, and risk management for plastics and rubber manufacturers.