PLEASE SEND A CHECK FOR $412,744.86!

As employers consider bene t packages for employees, one of the big questions that comes up is the 401(k) retirement plan. Employers face a myriad of decisions about plan design, structure, eligibility and participation. A very basic overview of the employer choices for this bene t looks like this:

1. Do nothing.

An employer is not obliged to o er a retirement plan for employees. This path eliminates any expense to the company and provides no bene t to workers.

2. Establish and o er a plan that matches employee contributions dollar for dollar up to a certain percentage of the employee’s salary.

A company may elect to match “dollar for dollar up to up to a certain % of eligible employee’s compensation.” For example, if you earn $10,000 a year and contribute money to the plan, your employer will match every dollar you put in up to $400 (4% of $10,000).

There are variations on this including an employer match of $0.25 on the dollar or $0.50 on the dollar up to a certain percentage of an individual’s compensation. The list goes on. What is consistent, is that every option requires the employee to contribute to receive any contribution from the employer.

In my opinion, this plan works well for the employee who has the extra money and discipline to save for retirement. I don’t remember much about my early years of employment; however, I can imagine being in my twenties thinking about an apartment, student loans, and meeting my friends for happy hour! I don’t remember making 401(k) contributions or considering getting old enough to retire! This plan wouldn’t have helped me much. (Matching a zero contribution doesn’t add up fast!)

Avon Renovations

PTSMC’S CHOICE:

3. O er what is known as the Safe Harbor Non-elective 401(k) plan. In this plan, the employer commits to contribute 3% of every eligible employee’s compensation to that employee’s retirement plan. This money begins to accumulate regardless of the employee's ability, willingness, or interest in saving for retirement. Regardless of your personal circumstances, if you are plan eligible, you are now saving for retirement!

In 2009, PTSMC made the election to provide our people with a Safe Harbor Non-elective 401(k) plan. At that point in our history, we had 59 eligible plan participants, and when it was time to pay the 3%, we sent a check for $93,652.06. In March 2023, PTSMC’s $412,744.86 check helped 263 of our team who were eligible for the plan in 2022.

Connecticut Wealth Management serves as the investment advisor for our plan. Every year they provide educational opportunities for our people and are available for individual advisement as part of the administrative fees of the plan. Everyone in our plan has a John Hancock account. The online resources available from John Hancock are exceptional. I encourage everyone to learn more about your options through both companies.

If you have questions about the plan, you can reach out to any of the following three people: Mallory Mason, Sandra Boccialetti, and Sandy Wickman Mason.

Has electing to provide a Safe Harbor Non-elective 401(k) plan been expensive for PTSMC? Absolutely! Do I regret the decision I made years ago? Absolutely NOT!

I am proud that PTSMC is in a position to support the people who make us who we are and allow us to do what we do.

Thanks,

Alan

Avon recently completed renovations that transformed the space into an open, modern, and bright clinic.