圆 Insights
_ A publication of the Marek Family of Companies
^
Fall 1991
New Company Benefit: "One for Two In ’92" Helps Retirement Planning The Marek Family of Companies is pleased to announce that beginning January 1，1992, it will match a portion of employee’ contributions to the companies’ 40IK retire ment savings plan. Themed "One for Two in ’92' the plan calls for a company contribution of $ 1 for every $2 an employee puts into the plan. However, the maximum company contribution is limited to one percent of an employee’s
earnings, up to a maximum of $500. Under the plan, a $10 per hour employee ($20,000 per year), can receive up to approxi mately $200 of company matching based on the one per cent maximum. To get the $200, the employee would have to contribute $400 of his own money since the matching ratio is one for two. ’’The 401K savings plan, with its matching provision，allows us to join together with our em
ployees in a sharing process that helps build their retire ment program. We are very ex cited about this new benefit and hope our employees will be able to take advantage of it." says President Stan Marek. "We are reaching a major mile stone with this commitment to begin matching, however, our ability to continue to match， just like our ability to provide any benefit, will depend upon overall company performance and profitability." adds Stan.
How the fund would grow for a 35-year old employee who enrolled in the plan in 1991， and will retire in the year 2021. Based on a current annual salary of $20,800 5.00
$ 10.00
Monthly contribution
21.67
43.33
86.67
Annual contribution
260.00
520.00
U040.00
Employer matching
130.00
208.00
208.00
Total annual contribution
390.00
728.00
1,248.00
If you elect to contribribute weekly
$
$
20.00
If the investment earns 7% Balance after 5 years
2.327.00
4.344.00
7,446.00
Balance after 10 years
5.590.00
10.436.00
17,890.00
Balance at retirement
35,635.00
66.519.00
114,035.00
If the investment earns 8% Balance after 5 years
2.386.00
4,454.00
7,635.00 18,853.00
Balance after 10 years
5.892.00
10.998.00
Balance at retirement
42,575.00
79.473.00 136,241.00
If the investment earns 9% Balance after 5 years
2.446.00
4.566.00
7,828.00
Balance after 10 years
6.210.00
11.592.00
19,873.00
Balance at retirement
51,033.00
95.263.00 163,308.00
The figures shown here are for illustrative purposes only and assume the same annual contributions each year continuing until retirement. Investment results are not guaranteed.
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Employees will learn more about the 401K retirement sav ings plan in November in em ployee meetings. Following this educational process, em ployees will then be given the opportunity to elect to begin making contributions to the plan, or change any decisions concerning the 40IK plan made during September’s open enrollment. The "One for Two in ’92" theme is being used to help em ployees identify with the $1 match for $2 of employee con tributions. The company has had the 401K option as part of its profit shar ing plan since 1989. However, until the decision to provide a percentage match from the company, the plan was entirely funded by employee contribu tions. Already the plan has more than 300 employees making contri butions that have grown to more than $300,000. The plan’s funds are invested in certificates of deposit. Texas Commerce Bank is the custod ial trustee of the assets. Hand and Associates, a Houstonbased benefit consultant and actuarial company, provides administration of the plan. Federal tax law changes in recent years have made the 40 IK a popular way to fund retire ment plans on a pre-tax basis. In addition, interest earned by the money in the plan is not taxed until it is withdrawn, which is usually at retirement.