Start a workplace savings plan for your trucking company


Americans’ readiness to retire is bleak.

A 2015 Federal Reserve report found that 31% of non-retirees have little to no retirement savings. In the same report, half of all non-retirees were not at all confident or had confidence in their ability to make investment choices. Also, the average American has only $20,000 saved for retirement. As a result, most Americans simply cannot afford to stop working.

The biggest factors contributing to the lack of retirement savings are a lack of education, lack of workplace plans (one-third of all companies do not offer workplace savings plans), and frequent payouts from retirement accounts (looting accounts to cover larger expenses).

Unfortunately, the same circumstances plague the trucking industry. A recent survey by CCJ sister publication Overdrive found that most drivers do not have retirement plans, and just 14% of drivers surveyed said retirement was a top priority for them. With so little savings, these drivers will not be able to retire.

Here’s the math: According to Indeed, the median driver’s annual income is $80,970. The top annual Social Security income is $40,140. The shortfall of $40,830 must be made up with an account balance of over $1 million.

For late-saving baby boomers, the hurdle to that cool million is just out of reach. However, trucking companies have a unique opportunity to induct and encourage their younger drivers and driverless employees to take retirement planning seriously. The introduction of a company pension plan results in many advantages for the company. These benefits include tax credits for the first three years of committing to a plan, tax deductions, employee retention and a boost in morale. Additionally, the business owners may be looking for a way to build their retirement accounts.

When a company launches its retirement plan, the company must have a well-formulated game plan for the plan to be successful. The game plan is usually expressed in a document called The Employer Policy Statement. The Employer Policy Statement (EPS) is written by the company, investment advisor or other trustee of the plan. It should be written in plain English, explain why the plan exists, include quantifiable plan success metrics, and other important information about the plan.

After the company completes the EPS, the plan must be distributed to eligible employees. If necessary, opt for automatic enrollment and automatic escalation of savings. Both of these things reduce low labor force participation rates and low employee savings rates. In addition, it saves an enormous amount of time in the registration of newly entitled employee documents and initial registration documents. Once registered, the firm should endeavor to provide holistic advisory services from a well qualified financial advisor.

Usually the plan runs smoothly and there are no major problems. Many financial advisors list their services as holistic and are happy to take on your plan, but a firm should interview a prospective plan advisor and ask the following:

1. Do you have an annual quota? If so, walk. Your compensation is based on new sales. Once they complete the sale, they will be forced to focus their efforts on the next sale.

2. Do you have the 66 series or the 6 series? If they’re 66, they can give their employees objective investment advice. If they have the 6, they are sales representatives on a commission basis.

3. How many plans are you a broker on? If it’s less than five, then workplace savings aren’t a significant part of their business.

4. What is your process for implementing and monitoring our plan? Do they have a “set it and forget it” approach? When this is the case, the firm makes no serious effort to meet with plan trustees and discuss plan benchmarks, investments, or service providers.

Avoid the mistake of not opting for escrow services, automatic scheduling features, or mailing services. While these may seem like cup holders and seat warmers for one scheme, they are very effective in reducing the administrative burden taken on by the company.

John Scarborough is an independent financial advisor based in Houston, Texas and can be reached at [email protected]


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