As more and more young people are graduating college and joining the ranks of the service sector, the need for employers to offer 401k retirement plans has been as strong as ever. 2015 will see a number of innovative corporations offer great benefits for those that hold part-time jobs.
Is the 401k still relevant?
If this is your first time on the job market, you might not know what 401k plan is. Having a 401k means that you, as an employee, have the option to put a percentage of what you earn into an account before any income tax is deducted. This way you save money and reduce the amount of taxes you pay and it is designed to be a way for people to support themselves when they decide to eventually retire. 401k plans have been traditionally associated with full-time, professional jobs which require a college degree. It may sound surprising then to find out that a 401k is available with certain part-time jobs that do not require advanced qualification. Most of the time employers will also agree to match the percentage employees choose to save, and this can lead to a doubling of the savings.
One of the first companies to offer 401k plans in the service industry is Starbucks. They have a number of benefits for those that meet certain criteria (for a start, those who work more than 20 hours a week). Among these benefits you will find perks such as bonuses, health insurance and discount prices for stock purchasing. Starbucks’ 401k options allow for matching of employee contributions ranging from 25% to 125% for up to 4% of their total salary. In addition to that, the free pound of coffee offered to all employees make Starbucks one of the places with the highest rate of employee satisfaction.
Another corporation that has begun offering 401k plans to part-time workers is Whole Foods. Not only do they pay their employees more than competing grocers, but they also offer over 30 options for the 401k retirement plan. The 401k plan is held at Fidelity NetBenefits and already contains almost $400 million pooled in from over 4500 participants. Those who choose to participate have an average 401k balance of $8000.
It is welcome news to hear that more employers will expand their 401k programs to part-time workers in 2015. However, not all news is so rosy. Darden Restaurant, an employer who is known for its terrible 401k plan, has recently made headlines for making their retirement plan even more unattractive. Darden Restaurants is one of the largest restaurant companies in America, owning brands such as Olive Garden, LongHorn Steakhouse and Red Lobster. Perhaps it’s their size that allows them to offer less than the best for their employees. Only 13% of employees participate in the program with 44% having their savings invested in Darden’s less-than-stelar stock.
However, whether it’s Starbucks or Darden Restaurants, progressive employers are looking to 401k plans as a tool for attracting and retaining new workers. This movement is expected to grow in 2015 with more employers offering not only retirement plans but other benefits such as health, dental, life and disability plans.