In a year when employment was the focus of many conversations, plastics manufacturers accounted for more than one million jobs in 2020.
Yet, findings by the Manufacturing Institute and Deloitte suggest that a skilled labor shortage of 2.4 million workers is on the horizon. Knowing this, one thing becomes clear — the competition to recruit and retain skilled workers is about to heat up.
So, how can your business stand out?
A 401(k) plan that meets your employees’ needs could be one cost-effective option. In fact, nearly 80% of workers prefer new or additional benefits to a pay increase, according to Glassdoor.
Ask yourself the following questions to determine whether your retirement plan is helping to attract and retain the best talent while accomplishing its fundamental goal of preparing your employees for retirement success.
Does your plan help employees properly save for retirement?
The median age of employees in the plastics industry is 44.8, and with more jobs to fill in the future, your business will need a plan that balances the unique needs of each employee age group.
An effective plan should support your efforts to increase employee enrollment and savings. Plans can accomplish this by offering enrollment materials, ongoing educational support to you and your employees, and services that provide investment advice.
As you review your plan or explore options in the industry, use the following to help gauge the effectiveness of the plan. Does it:
- Encourage employees to save for retirement by providing education and enrollment materials?
- Provide diversified investment options from experienced asset managers?
- Suggest financial wellness tools to help participants meet their financial goals?
- Provide customized investment advice for plan participants?
- Offer additional plan features such as Roth after-tax or profit-sharing contributions?
Does your plan offer services to reduce your business’s liability?
This second question is a bit more complex, but one that could significantly affect your business’s responsibility and risk, also known as your fiduciary responsibility.
By offering an employer-sponsored retirement plan, it’s your responsibility to make sure the plan serves the best interests of your plan participants and their beneficiaries. You’re also responsible for choosing the investments made available to them.
Fortunately, some retirement plan providers can help ease that burden by connecting you with an independent service that makes the investment choices for your business. The service will then take on some — or all — of the responsibility for selecting and monitoring the investment options within your business’s retirement plan. For many plastics businesses, this means easier management and added legal protection against the growing number of 401(k) lawsuits.
Additional qualities that an independent service can provide to help reduce your business’s responsibility and legal liability include:
- Customized investment advice for all participants, regardless of age, income, or net worth;
- helping your business understand how to meet its fiduciary obligations;
- coverage to help protect your business against lawsuits.
Less than a year removed from thousands of businesses reducing their 401(k) contributions, according to a survey by the Plan Sponsor Council of America, the ultimate question isn’t what plan you should choose. It’s how a provider’s plan will put your employees on track for retirement without adding more responsibility and risk to your business.
Start by exploring your available options, putting your employees in the driver’s seat, and giving them a clear roadmap to 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 services for plastics and rubber goods manufacturers.