To recruit and ultimately retain top talent, companies are looking at how they structure benefit packages – specifically, using immediate vesting as a tool to set themselves apart.
It seems like paying a high salary is still the biggest draw for job seekers, but for companies looking to edge out the competition and hire the best people, structuring benefit packages in a more attractive way is definitely on the radar.
Having a retirement plan that include a short vesting or immediate vesting option is attractive to many job seekers, as well-thought-out benefit packages can sweeten a job offer in a competitive market.
Many companies have a waiting period before they match employee contributions to a 401(k) plan but removing that waiting period, or using vestment immediately, can be a draw – if other employers aren’t offering it.
Immediate vesting can often mean more money in the long run and job seekers might weigh that with an initial higher salary offer without it.
According to a Vanguard study, a little less than half of defined contribution plans have immediate vesting.
Currently plan sponsors are using vesting options as a way to retain talent, but experts say using immediate vesting options could be a better move to recruit talent. This is because for the most part, employees don’t really understand vesting at their company and so they could leave the job not fully grasping what they are missing.
An immediate vesting option might also be a way for employees to make more money in the long haul, because they can invest more money with a company match for a longer period of time. Smart employees who understand playing the long retirement game understand that this could outweigh a temporary higher salary offer elsewhere.
Do you still have questions about retirement planning options?
Follow us on LinkedIn and Facebook!
If you have other questions about retirement plan loans,email us or call 937.308.0758.
Recent Comments