What if you can help your employees with their retirement and their student loans at the same time. All tax-deductible! It all seems to be in making...
In the veterinary industry, 3.1% of gross revenue is spent on benefits packages. That number is based on the recently published Financial and Productivity Pulsepoints (10th Edition), and it is sourced from 2017 data. Let’s run the numbers: from gross revenues of $300,000, that is only $9,300. The same publication, using 2012 data (7th Edition), reported 3.3% of gross revenues were spent on benefits packages. The decrease is unsurprising because, with health insurance premiums skyrocketing over the past few years, it’s no wonder benefit packages seem to be on hold.
Long-term benefits are a great way to pull in talent. They are what get employees through your door, and they are also what employees will cherish… for a few months. Watch out, as most long-term benefits become an expectation.
Be creative as introduced in our previous article: Tip: Out With Bonuses, In With Incentives
Speaking of creativity, the IRS approved a private letter ruling for Abbott Laboratories' proposal to amend its 401(k) plan to include a student loan benefit program. The employer had been providing a 5% match in the employee’s 401(k) plan if the employee contributed 2%. The new rule states that the employee doesn’t have to contribute to the retirement plan but can instead contribute to paying off student debt, and the employee will still receive the 5% contribution to his/her 401(k). This addresses the main reason why young veterinarians don’t contribute to their retirement accounts since over 20% carry over $200,000 in debt. On May 23, 2019, the Retirement Enhancement and Savings Act of 2019 passed in the House and is expected to make it through the Senate during this current term. This bill carries a student loan and retirement adjustment similar to what was in the Abbot Laboratories private letter ruling.
Keep the end in mind, be creative, keep your employees motivated, and if you are the employee, don’t take the benefits for granted. Your employer cares about you, your happiness and your family