At Prairie Field Services we believe in supporting our employees by helping them plan for the future. That’s why we’re proud to add a new 401(k) plan to our existing benefit package.
A 401(k) refers to a retirement savings plan sponsored by an employer. It lets employees save and invest a portion of their paycheck and grow in a tax-free environment. While contributions to a 401(k) will either be after-tax dollars, or pre-tax dollars that will later be taxed in retirement, any growth within the plan is not taxable which is a main feature of the 401(k).
The true benefit of most 401(k) plans is the contribution match made by the employer. And with the Prairie Field Services 401(k), our contribution match is very generous and competitive. To help our employees build wealth and prepare for the future, Prairie Field Services will match:
- 100% of every dollar contributed by the employee, up to 3% of the employee’s annual salary.
- 50% of every dollar contributed by the employee, from 3% up to 5% of the employee’s annual salary.
- If an employee earning $50k per year chose to contribute $1,500 (3% of their annual salary spread out over every pay period) to the Prairie Field Services 401(k), we would match that contribution dollar for dollar, adding an additional $1,500 to their account. That’s $1,500 they would not have earned if they hadn’t contributed to their 401(k).
- If the same employee contributed $2,500 (5% of their annual salary spread out over every pay period), we would match the first $1,500 dollar for dollar, and then the last $1,000 at 50%. The result would be a match of $2,000 contributed by Prairie Field Services.
Unlike other 401(k) plans that require employees to work for a certain period of time prior to gaining the benefit of an employer contribution, any contribution made to a Prairie Field Services 401(k) vests immediately. In addition, Prairie Field Services takes responsibility for the majority of the costs of investment, making sure there are no fees taken out of the investment itself, and the employee’s money goes even further.
Why would an employee take advantage of the Prairie Field Services 401(k)?
- It’s automatic. The employee can decide what percentage of their pay they want to deduct from their paycheck, and the plan will handle the rest.
- Tax flexibility. Plan participants have the option to deduct contributions from their paycheck in the form of a traditional pre-tax contribution or using after-tax dollars in the form of a Roth contribution. Our plan advisor, Sam Rogers, is available to help clarify which tax allocation would be most suitable.
- Compound interest. The younger an employee is when they start contributing (and receiving the Prairie Field Services contribution match), the more they can benefit from “compounding” – money earned on previous investment earnings.
- The Prairie Field Services 401(k) plan doesn’t tax any earnings made while they remain in the plan. That means an employee’s balance has the potential to grow faster – even if they can only save a smaller amount in the beginning.
- Matching contributions. Any contribution made by Prairie Field Services to an employee’s account is an immediate return on the investment the employee is making in their future.
How can employees manage their Prairie Field Services 401(k)?
Employees can sign up and start contributing at any time with full control over how their money is invested. We chose to partner with Securian, a world-class provider, that lets employees easily and directly control their funds. Employees can take a more hands-off approach and utilize a ‘target date fund’, which will match the risk profile of the portfolio to their projected retirement age/date; or they can create a custom portfolio and choose to spread their investment over their choice of stocks, bonds, and money market investments.
Sam Rogers, a Northwestern Mutual Financial Advisor working closely with our employees, suggests that if employees are keen to develop a custom portfolio, there are some simple rules they should follow.
“The ideal allocation would have a good mix of the 9 asset classes – Large Cap, Small Cap, Mid Cap, Fixed Income, Emerging International, Developed International, Commodities, Real Estate and Cash. Too much exposure to one or a few asset classes makes for a risky allocation.”
Sam understands the value of investing for the future. As part of the Prairie Field Services Retirement Plan, he’s available for a free personal financial planning session to help you along the way.
“A smaller amount today, is better than a larger amount at an undetermined amount of time. In other words, start with 1% and try to increase 1% each year after that. Taking advantage of the match is crucial. It’s free money! Trying to get to 3%, and eventually to 5% would be the goal.”
Thinking about the challenges of tomorrow, or retirement, can be difficult. But preparing for them doesn’t have to be. With the Prairie Field Services 401(k), our employees can take simple steps to save for their future, and at the same time make the most of their present employment with Prairie Field Services.