Let’s all remember The Huffington Post moved its coverage of Donald Trump to the entertainment page in an effort to diminish and disparage, only to revert back to the news page as his popularity rose. Who’s laughing now?
Historians note the National Socialist German Workers’ Party (commonly known as Nazi) was similarly dismissed as childishly buffoon before unleashing the greatest horror in the history of the world. No, we’re NOT calling Trump a Nazi, a term far too cavalierly thrown about in our meme-driven political “discourse;” we’re simply noting that the lefty Alinsky rule No.5, “ridicule is man’s most potent weapon,” doesn’t always hold.
We certainly can’t claim any kind of smug prescience on the matter; indeed, who would have seriously considered Trump a frontrunner, a man who garnered 7 percent of the vote in a hypothetical run against George W. and Al Jr. as the Reform Party nominee in 2000, something that caused him to quickly drop out.
So, now that it’s serious, we’ll take a serious look at the man—specifically as it relates to 401(k)s. A common trope is to judge a person’s character by how they treat service workers (a horribly condescending measure, but it suits our purposes). More specifically, how might he treat financial services in general, and the 401(k) industry in particular, were he to become El Presidente? The answer can be gleaned in how he treats his own workers.
Citing 5500 filings, Bloomberg took a look at Trump as plan sponsor last summer, when his presidential routine first got rolling. It reports his matching contributions were actually “more generous than average.” If a worker contributed 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 employee stayed, it added, Trump’s contribution wouldn’t completely belong to them for six years, a vesting schedule that’s “the slowest allowed under U.S. law.”
Under Bloomberg’s rating system for 401(k) plans, Trump scored 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.”
The plan scores a 59 under the rating system at BrightScope, which called the Trump plan “below average” for its peer group.
So yeah, the man who would be president doesn’t rate well, but at least he offers a plan. Yet as with so much about Trump, is it all simply for show?
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.
At least he owns a business. Very Biased article. Not too much credibility of your website when you write an editorial on Trump. I have now unsubscribed and will let others know as well.
Understand that the industry he works in has very high turnover and plan design which promotes employee retention is crucial. Bloomberg and BrightScope don’t take industry into consideration for scoring. Show me one of his competitors who has a better plan.
I too agree that this is a bad attempt at a Trump hatchet job. Though I am hardly enamored with Trump, his 401k design is far more typical than not. A 401k plan is used to attract, retain, and reward employees. A 401k plan is not an employee benefit that is an open door to providing “goodies”. It is very clear that the person who wrote this article has never designed a 401k plan in his life. Take for example the vesting schedule. Would the author recommend no vesting at all so employees can simply take the employers contributions when they separate employment after say a year or two? Vesting schedules are used to retain employees. As far as the comment “You can’t even join the plan until you spend a year as a Trump employee”. If an organization the size of Trumps allowed every single employee entry from day one, the administration costs of the plan would be astronomical! Lastly, his comment “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.” Once again are you recommending ongoing valuations to be a better employer or “fair”? Try not only administering a plan like this yet alone paying a TPA the costs associated with such a policy!
I would bet the author is the type of person that thinks employers are here to serve their employees. A dangerous mindset that this country truly needs to change or we are doomed. Nothing is for “FREE” as too many of our politicians and the liberal press would like to mislead our citizens into believing. Ever wonder why so many employers are taking the jobs to other countries? The misinformed beliefs of the author are key reasons!
Well said. I am certain author has no idea of how 401(k) plan design is determined. Why would this article even be allowed in a 401(k) publication?
I previously thought your publication was an objective one. Now I know it is political. I will get my 401(k) news from Plan Sponsor going forward.
I like the Trump plan design, it provides an incentive for the employee to have more skin in the game. What would Bloomberg prefer? 3% match, 100% vested and immediate eligibility? Any sponsor trying to retain top talent would never have a plan like that. “More generous than average” benefits require more barriers to entry, and reward committed employees. There is no “catch” Mr. Sullivan, that’s just smart business.
I’m with you John. A not so subtle way of making 401k news political. I just selected the unsubscribed button.