What’s in DOL Pick Puzder’s 401(k) Plan?

The company's 401k plan doesn't taste so good
The company’s 401k plan doesn’t taste so good.

It’s a fast-food 401(k) plan without a lot of nourishment. Reuters took a look at the 401(k) plan for CKE Restaurants, the company run by Andy Puzder, President-Elect Trump’s pick to run the Department of Labor. CKE owns popular burger brands Carl’s Jr. and Hardee’s.

Citing Brightscope data, the wire service finds the plan “is less generous than some of its fast food competitors” and “carries high-fee investments, has low participation and generally scores worse than many of its rivals even in the notoriously high-turnover, low-benefit fast-food industry.”

In 2015, CKE opted not to match the retirement contributions of the plan’s participants, Reuters adds, sourcing Form 5500 data.

The particulars of the plan offer a glimpse into how Puzder might handle the controversy surrounding the DOL’s 401(k) fiduciary rule. Puzder is known for his strong antiregulation views which, according to The Wall Street Journal, has “fueled speculation among financial-industry experts that the Labor Department’s new retirement-savings rule faces delays or even a rollback.”

“Should Puzder want to take action against the rule, his quickest move could be to delay its implementation while the Labor Department and the Securities and Exchange Commission, which has considered a comparable rule for all investment advisers, take another look,” Reuters concludes. “One way to delay it could entail declining to enforce the rule.”

In July 2015, Bloomberg took a close look at the 401(k) that Trump provides his employees.

It reported his matching contributions are actually more generous than average. If a participant contributes 6 percent of their salary, Trump would kick in 4.5 percent.

“But there’s a catch,” according to the news service. “You can’t even join the plan until you spend a year as a Trump employee. Call it an apprenticeship. Then, if you want that matching contribution, you have to wait until the end of a calendar year. Leave—or get fired—in October, and you get nothing.”

Even if the worker stays, it added, Trump’s contribution doesn’t completely belong to them for six years.

“That vesting schedule is the slowest allowed under U.S. law. And if you worked for Trump from March 1, 2009 through June 30, 2012, you were out of luck entirely. Trump, who claimed an $8.7 billion net worth last month, suspended all employer contributions to 401(k)s for more than three years.”

Under Bloomberg’s rating system for 401(k) plans, Trump scores a 30 out of a possible 100, lower than all but one of the top 50 companies by market capitalization. It scored one point back in 2011 when Trump wasn’t matching contributions at all.

John Sullivan
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With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.

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