Challenge and Solution
RETIREMENT PLAN CHALLENGE
A client with a large, professional workforce had a 401(k) plan with no match, but a large profit sharing plan in place. Employees were receiving a larger-than-normal profit sharing contribution from the company, but were not seeing the benefit of such a bonus. Instead, employees were comparing the lack of a company match to the sizable match given by mega-companies in the area.
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POTENTIAL SOLUTION
Following disappointment and frustration by the employees, we suggest that the plan structure be changed significantly. First, we would shift a portion of the funds from the "bonus" into a significant and meaningful match. Second, the business owner would have us take into consideration a "performance or productivity" factor he had devised to enhance the match. Third, we would keep the bonus, but at a lower level than in the past.
The combination of a meaningful match with the productivity/performance factor is quite distinct and this outside-the-box thinking could lead to an amazing shift in employee morale, work ethic, engagement in the profitability of the company, and a new energy level and dynamic within the firm.
CHALLENGE
At the end of 2008, the market broke sharply and most asset classes dropped in value. Surprisingly, this included bonds. Money market rates dropped, as well, and corporate CFO's and treasurers were left with significant amounts of cash paying virtually no returns.
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POTENTIAL SOLUTION
We see the need, would find an opportunity in the market, and invest in a cash alternative. We are currently assisting corporations, business owners and individual investors with cash management alternatives. These accounts start with $50,000 and go up to $10 million.
These are hypothetical examples for illustration purposes only. Actual investor results will vary.
