Anthony Waldera spends more than he has to on his 401(k) plan, and he thinks you should too.
Waldera is the CEO of Colorbrite Inc., a $16 million prepress company based in Minneapolis. Hesuggests that companies follow his lead and promise to match up to a whopping 10% of employees'total compensation in their 401(k) retirement accounts, up to the IRS-mandated limit of $10,000 a year.That may seem like excessive generosity, but Waldera says making the 10% match is the smartestthing he's done.
Initially, Waldera's idea was discredited by his bankers and accountant, who thought it was a money pit.The match costs Colorbrite about $500,000 a year, Waldera calculates. But since he's ramped upmatching, the company has enjoyed its highest profitability since 1989. All but 3 of his 90 employeestake advantage of the largesse, and in anonymous surveys they ranked the match as their most valuedperk.
Indeed, Colorbrite's plan is "a rich match," according to retirement investment adviser Dan Maul, whoseKirkland, Wash., firm, Retirement Planning Associates, specializes in creating plans for smallbusinesses. But Maul cautions that not every company can follow Colorbrite's lead. For example, fewcompanies have that much money to invest in a matching plan. "You never want to mess with thematch, at least as far as reducing it," he says. If, in a few years, Colorbrite can't fund the 10% match,employees may feel cheated and flee.
Waldera is unfazed by that possibility. "Nothing we've done in the past five years has been as positiveas this," he says. "Everyone can mentally calculate exactly how good this program really is. Ten percentmakes it simple and powerful."