Job hunters need to ask about 401(k) contributions, matches gas 99 cents


Malloy said saving for retirement is part of a team member’s overall financial wellness. New hires who are juggling student loans tend to want to learn how to balance their financial obligations — and don’t typically skip saving in the 401(k) once they are signed up.

Depending on the plan, employees may have a 90-day window after auto-enrollment to opt out by withdrawing contributions and earnings. They would owe income tax on those contributions and earnings, but would not be subject to a premature distribution penalty of 10%.

For 2018, the basic limit on employee contributions for 401(k) plans is $18,500. The catch-up contribution for those 50 and older is another $6,000. Other limits can apply based on the plan. Do I have any choice about how my retirement money is invested?

But if the employee is automatically enrolled and doesn’t choose how to invest the money, most of the time — nearly 64% of plans — initially will end up investing the money in target retirement date funds, according to Plan Sponsor Council of America.

If new hires have not enrolled in the plan by the end of the first 60 days on the job, they will automatically be enrolled in the 401(k) at 3% of pay before taxes, according to Tonit Calaway, vice president and chief human resources officer for BorgWarner, which has its headquarters in Auburn Hills.

The employee starts contributing at 3% but contributions increase automatically by 1% each April 1, unless that employee elects to opt out of the automatic increase. The auto increases stop once an employee reaches a 10% before-tax contribution rate.

All new salaried employees are automatically enrolled to contribute 5% of their pay — which allows the full company match of 4.5%. Example: If you make $50,000 a year, you’re setting aside $2,500 — and getting a match of $2,250. In addition, salaried employees get a company retirement contribution ranging from $1,750 to $2,750.

For hourly workers, the automatic enrollment is 3% of pay — going up by 1% a year to a maximum of 6%. (Employees can contribute more or less, if they’d like.) There are not typical matching contributions for hourly employees. Instead, there are two automatic company contributions — one is based on 6.4% of base pay and another $1 per base hour worked per pay period. Henry Ford Hospital System: Maximum match of 3.5%

New employees are auto enrolled in the 403(b) at 3% of earnings after about 60 days of service. Then, employee contributions of up to 6% are matched at a maximum of 3.5%. The formula is a dollar-for-dollar match on the first 1% of contributions and 50 cents on the dollar on the next 5%.

In addition to the matching contribution, Henry Ford enhances the 403(b) plan benefit by also offering an annual "employer-paid only" contribution to the plan on behalf of employees — based on their age and years of service. Stryker: Auto-enrollment for new hires

Stryker also has made a discretionary contribution for non-sales rep employees to the plan for the past 28 years for employees who work a minimum of 1,000 hours and are employed on the last day of the previous year. Those employees receive 7% of their salary and bonus into their 401(k) plan regardless of whether they participate in the plan. Cornerstone Community Financial Credit Union: An extra 4% contribution

The Auburn Hills-based credit union, which has about 70 part-time and full-time employees, has a dollar-for-dollar match on up to the first 4% of an employee’s contributions into the 401(k). But the credit union adds another 4% of pay on top of that match in lieu of a pension.

Andrea Cornell, human resources manager, said new hires can start contributing to the plan after one year on the job. New participants can join the plan in the first quarter after reaching the one-year mark — Jan. 1, April 1, July 1 and Oct. 1.