The ordinary 401(k) plan works so well that most companies take it for granted. Not Wabash National, a trailer manufacturer based in Lafayette, Ind. The company takes every opportunity to reinforce the idea that employees share in its success. So it added a twist to its plan: the employer match on its 401(k) varies according to company profitability.

With a 401(k) plan, employees may elect to set aside a percentage of their salary, pretax, in a retirement plan. Many employers match a percentage of the employees' contribution. Usually, that matching rate is fixed -- say, at 50% -- for no apparent reason. Wabash president Jerry Ehrlich says, "Any program that's at management's discretion creates suspicion." A formula builds trust.

Here's how it works at Wabash: if the company makes any gross profit at all, it matches employees' 401(k) contributions, up to 5% of their salary, at 30¢ on the dollar; and for every one-quarter of a percentage point's profit over 5%, it increases the match by 1%. So when Wabash made a 6% profit before taxes in 1991, employees received a 34% match.

Although the system encourages extra effort by employees, it has payoffs for them, too. Wabash does an extraordinary job of communicating the benefits of its 401(k). That not only helps employees understand the plan more clearly, thus making the incentive to participate stronger, but also helps workers better comprehend the importance of saving for retirement.

When Wabash employees become eligible for the 401(k) plan, they meet as a group with a consultant provided by the fund manager. After a week employees again talk to the consultant, this time one-on-one. Starting this year, employees' families may participate in the educational meetings. And employees may sign up for a program in personal finance led by a local accountant. That up-front effort should leave Wabash's employees much better prepared for retirement than the general population is.

Such attention to financial detail isn't unusual at Wabash, an open-book company that spends substantial time and money educating employees about its numbers. One result of that effort: more than 90% of Wabash employees are enrolled in the 401(k) plan, compared with an average nationwide participation rate of just 57%.

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An Employee Benefits Research Institute survey finds that 51% of workers rely mainly on savings for their retirement, rather than on a tax-advantaged plan. A third save in an individual retirement account; just 20% save in a 401(k). And employee savings are way down, says a Georgia State University poll. Those making less than $30,000 a year, for instance, saved about 2% of their salary in 1991, compared with more than 9% in 1989.

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