In the May issue of CFO magazine, there was an article discussing companies’ approach to their 401(k) plans. In a nutshell, many companies have had to make the hard decision to suspend matching contributions to their employees’ plans. As you could imagine, employees have not responded well to this news. Companies are saving money short term, but as the article states, “a bigger problem may materialize later, if the impact to morale prompts more employees to leave once the economy improves.”
Question: Which industry, as a whole, has suspended their 401(k) benefits in the greatest number?
Answer: The transportation industry, with 43% of the companies having suspended their 401(k) matches from 2008-2010.
However, we are pleased to report that JK Moving Services is not one of those companies. JK makes a strong commitment to its employees, because our employees are our most important asset, delivering peace of mind to our customers.
JK generously contributes the equivalent of 3% of an employee’s salary into a company-sponsored safe harbor 401(k) plan for them, even if the employee elects not to contribute on their own. JK bears the cost of this contribution; that is, there is no fee and no cost to the employee. It’s a tax deferred retirement savings plan that JK provides to its employees, and has done so since 2007. Employees may contribute their own tax deferred earnings beginning on their first day with the company, and are always 100% vested in both the company’s contribution and their own deferrals.
Along with the safe harbor 401(k) plan, JK offers a 100% company-paid Profit Sharing Plan (PSP). This is another way that JK invests in its employees, by letting them share in the success of the company. With the PSP, when the company does well, the employees also do well. For example, last year, each employee received the equivalent of 10% of their salary deposited into their PSP account.
All told, JK has contributed just over $12,000,000 to its employees through these various plans from 1987 to present.
Why would JK continue supporting both a 401(k) and a Profit Sharing Plan when so many others in the industry are suspending these benefits? It’s all part of JK’s commitment to recruiting, training, supporting, and retaining the best employees possible.