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      PostPress

      PostPress

      Print Decorating, Binding and Finishing

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        Management

        Elevate the 401(k): Turning an Ordinary Plan into an Extraordinary Retirement Strategy

        March 18, 2025

        By Joseph P. Trybula, CFP®, AIF®, Printers 401K

        For successful business owners and their employees, planning for retirement requires a strategic approach that maximizes tax efficiency and ensures substantial savings. Combining a Cash Balance Plan with a 401(k) Profit Sharing Plan offers a powerful way to achieve these goals – turning an ordinary retirement plan into an extraordinary plan, providing significant benefits that go beyond what standard retirement plans can offer.

        Understanding the Basics

        The 401(k) Profit Sharing Plan

        A 401(k) Profit Sharing Plan is a retirement savings plan that allows employees to contribute a portion of their salary to a tax-deferred account. Employers can match these contributions and make additional profit-sharing contributions based on company performance. The contributions made to the plan are tax-deductible for the employer, and the earnings on the investments grow tax-deferred until withdrawal.

        The Cash Balance Plan

        A Cash Balance Plan is a type of defined benefit plan that acts like a hybrid between traditional pension plans and defined contribution plans, like the 401(k). In a Cash Balance Plan, each participant has an account that annually grows in two ways: first, through employer contributions (usually a percentage of salary or a flat dollar amount), and second, through an interest credit, which can be fixed or linked to an index. Unlike a 401(k), the investment risk is borne by the employer.

        The Power of Combining Both Plans

        Substantially Increase Contribution Limits

        One of the most compelling reasons to combine a 401(k) Profit Sharing Plan with a Cash Balance Plan is the ability to significantly increase the total amount of contributions one can make.

        For 2025, the employee contribution limit for a 401(k) plan is $23,500, with an additional $7,500 catch-up contribution for those aged 50 and older, allowing for a potential total contribution of $31,000 for individuals in this age group.

        Under the SECURE Act 2.0, a higher catch-up contribution applies to employees aged 60-63. For 2025, this special catch-up limit is $11,250 instead of $7,500, increasing the potential total contribution to $35,750 for individuals in this age range.

        A Cash Balance Plan, however, allows for significantly higher contributions – especially for older participants – providing a powerful opportunity for tax-deferred savings.

        For example, a 60-year-old business owner might be able to contribute over $300,000 annually to a Cash Balance Plan, depending on the business owner’s income and the design of the plan. Combined with the 401(k) Profit Sharing Plan, the total potential contributions can exceed $350,000 annually, creating substantial tax-deferred growth.

        Enhanced Tax Deductions

        Contributions made to both the 401(k) and the Cash Balance Plan are tax-deductible, which significantly can reduce a business owner’s taxable income. This particularly is advantageous for high-income earners who are looking to lower their tax liabilities while simultaneously boosting their retirement savings.

        Flexibility in Plan Design

        These plans offer considerable flexibility in how they are structured. For example, profit-sharing contributions in a 401(k) can be allocated in a way that rewards key employees, while a Cash Balance Plan can be designed to provide higher benefits to owners and older employees. This flexibility allows business owners to tailor the plans to meet both their retirement goals and their business objectives, effectively turning what might be an ordinary plan into an extraordinary plan.

        Attract and Retain Talent

        Offering a combination of a 401(k) Profit Sharing Plan and a Cash Balance Plan can make the company’s benefits package more attractive to top talent. Employees value the stability and potential growth these plans offer, making them a powerful tool for recruitment and retention.

        Important Considerations

        Plan Administration

        Combining a Cash Balance Plan with a 401(k) Profit Sharing Plan adds complexity to the administration of retirement plans. These plans require careful management and compliance with IRS regulations. Working with experienced financial advisors and third-party administrators is crucial to ensure the plans are set up and maintained correctly.

        Funding Requirements

        Cash Balance Plans, as defined benefit plans, require mandatory annual contributions. This is different from the discretionary nature of profit-sharing contributions in a 401(k). Business owners need to ensure they have the cash flow to meet these funding requirements, especially during lean years.

        Employee Communication

        It’s important to clearly communicate the benefits and mechanics of these plans to employees. While they offer substantial benefits, the complexity sometimes can cause confusion. Providing educational resources and access to financial advisors can help employees make the most of these plans.

        Conclusion

        A combination of a Cash Balance Plan and a 401(k) Profit Sharing Plan represents one of the most powerful tools for building substantial retirement savings. By significantly increasing contribution limits, providing tax advantages and offering flexibility in plan design, these plans can help one achieve retirement goals while also benefiting the business. However, it’s essential to work with knowledgeable professionals to navigate the complexities and ensure the plans are tailored to everyone’s specific needs.

        Whether a business is looking to maximize savings, reduce tax burdens or attract top talent, the strategic use of these plans can provide financial security and peace of mind for the future. By combining these strategies, anyone can transform an ordinary plan into an extraordinary plan, setting the stage for a prosperous retirement. 

        Joe Trybula, of Diversified Financial Advisors, is an Accredited Investment Fiduciary™ (AIF®) who manages the Printers 401(k) Plan in partnership with the Foil & Specialty Effects Association, making it available to eligible members. For more information on the Printers 401(k) Plan and strategies to maximize the benefits of a plan, email joe@diversifiedfa.com or call 800.307.0376.

        Good Help is Hard to Find: Navigating Today’s Changing Labor Market

        December 10, 2024

        By Erin Blank, contributing writer, PostPress

        We’ve seen the headlines. We’ve read the data. We’ve experienced it firsthand. The printing, converting and affiliated industries are facing a troubling reality. Experienced workers are retiring or transitioning to other fields at a record pace, often without qualified replacements to step in. According to data from the Bureau of Labor Statistics, three of the top 30 occupations projected to see the largest job declines over the next decade are all within these sectors. With struggles mounting across the broader manufacturing landscape, what can the industry do to ease the pain? To address this challenge, PostPress spoke with print and packaging companies, along with leaders from universities with graphic arts programs, to uncover effective strategies for navigating the challenges of employee retention and recruitment in today’s market.

        Figure 1: Technology, like automatic plate hanging, makes operators’ jobs easier at JS McCarthy Print + Packaging.

        Investments in Automation
        For many print and packaging companies, investments in modern equipment and automated technology are helping assuage the labor shortage. “We’re investing in all aspects of the business, with the main objective of being more productive with the company’s existing workforce,” said Jon Tardiff, president of JS McCarthy Print + Packaging, one of the oldest and largest print and packaging companies in New England. Today’s printing and converting equipment, equipped with advanced automation and increasingly powered by artificial intelligence, requires less manual labor than ever before. This technology allows machines to be operated by smaller crews while also significantly increasing output.

        Not only does new technology help ease the challenges of a shrinking workforce, but it plays a crucial role in retaining existing employees. When companies invest in tools and resources that simplify employees’ jobs, it fosters greater employee engagement and loyalty and reduces the likelihood that they will seek opportunities elsewhere.

        According to Shawn Pereira, CEO of Spectrum Custom Packaging in Fremont, California, “Introducing new technologies provides team members with opportunities to learn and grow within the company while enhancing their satisfaction in producing high-quality products. These investments also help us promote our culture of working smarter, not harder.”

        Many companies are discovering that in addition to enhancing the efficiency of current employees, modern technology is attracting a younger generation of new workers. As ‘digital natives’ continue to infiltrate the workforce, more individuals are seeking roles that involve less manual labor and increasingly are drawn to working with systems powered by advanced technologies like AI.

        “I think when we talk about print and packaging in a ‘manufacturing’ sense, it’s often left up to the applicant to interpret what kind of workplace they’d have,” said Tardiff, “but when they come in and see the new technology, automation and robotics, it makes the industry very exciting for the younger generation.”

        Retainment Through Training and Strategic Employee Programs
        Beyond capital-intensive investments, prioritizing training and developing robust internal programs are essential for retaining current employees. With graphic arts organizations shrinking, independent skills training programs are becoming increasingly difficult to find, but online courses are available through organizations like the Printing United Alliance and some Printing Industries Association, Inc. (PIA) affiliates. Brodnax 21C Printers in Dallas, Texas, offers its employees access to PIA MidAmerica’s ‘MidAmerica U,’ an online platform that provides fundamental print and graphics training.

        Jimmy Singer, principal at Brodnax, said, “With the technology everchanging, whether the operator is a veteran of 35 years or just fresh to the industry, everyone has the opportunity to learn something new.”

        Training is robust in certain regions, but there is room for improvement, as Pereira highlighted the need for more resources near his plant in central California. To address these gaps, companies are directly partnering with manufacturers to offer employee training focused on maximizing equipment performance. Additionally, some organizations are developing their own internal training programs covering a variety of topics, including lean manufacturing, safety and management skills. Many also are adopting cross-training initiatives to develop their workforce for new opportunities while creating a safety net in the event of unexpected resignations.

        “Providing training for our employees signals to them that the company cares about them and wants to invest in their career and professional growth,” said Singer. “It also makes them more confident in their day-to-day work and increases overall job satisfaction.”

        Outside of training, companies are implementing various employee programs aimed at improving retention. At Spectrum, Pereira and his team have developed an ‘Employee Maturity Model,’ which allows team members to choose a growth path within the organization and work toward gaining specific competencies necessary for new roles. He said, “We align their goals with the company’s objectives and establish incentive compensation plans to support their achievement. This approach encourages employees to contribute at higher impact levels, increasing their earning potential and fostering a culture that promotes long-term loyalty.”

        For JS McCarthy, company culture means putting emphasis on work-life balance, social opportunities and the financial wellbeing of its workforce. In 2019, the company became 100% employee owned (through an ESOP). Tardiff noted, “Once employees understand the financial rewards of employee ownership, they are much more likely to stay with us.”

        Attracting a New Workforce
        While these initiatives will support companies in attracting a new workforce, the latest generation entering the job market also is prioritizing strong workplace culture and flexible scheduling options. This includes accommodation for alternative work hours, personal time off and hybrid working environments.

        “Students today are looking for employers that concentrate on work-life balance,” said Patrick Klarecki, professor of Graphic Communications at Ferris State University in Big Rapids, Michigan. He also emphasized the importance of engagement from the very beginning. “This generation is eager to make meaningful contributions and improve their workplaces from day one, rather than simply being ‘clock punchers.’ If they feel easily replaceable, they quickly will look for opportunities elsewhere.”

        Figure 2: A hands-on learning approach for Graphic Communications students at Ferris State University.

        Dr. Eric Weisenmiller, associate professor for Graphic Communications at Clemson University in South Carolina, sees similar trends with his students. Clemson boasts one of the largest Graphic Communications programs in the country, with 370 students currently enrolled in the university’s four-year program. Weisenmiller said, “Graduates seek self-driven work schedules that prioritize quality of life alongside their professional responsibilities. They are seeking direction and an ability to latch onto a path that either will buy them into the company or set them on a path for growth.”

        For companies willing to embrace a more progressive environment, the shift could have considerable return on investment in the long run. “Other industries are doing these things,” said Klarecki. “If we want the quality of talent in our businesses, we need to be – at the very least – at a similar level as other industries to attract new graduates to work for us.”

        Beyond changes within individual workplaces, the leaders of both print and packaging companies and universities agree that the industry, as a whole, must improve its marketing efforts, particularly in targeting younger audiences.

        “Businesses need to start advocating and educating at the secondary school level, so that young people consider the opportunities in printing, packaging and other applied sciences,” remarked Dr. Bruce Myers, associate professor of Packaging and Graphic Media Science at the Rochester Institute of Technology in New York. With few graphic arts programs available in high schools, Myers said print simply is perceived by this demographic as limited to newspapers – “an image that doesn’t accurately reflect the growth potential available in the industry.”

        Graphic communications educators widely believe that to truly thrive as an industry long-term, advocacy for careers in print and packaging needs to start early. Dr. Doug Younger, professor of Graphic Communications at Pittsburg State University in Kansas, suggested that print companies become partners with area schools that teach graphics and assist with their curriculum or allow field trips to their facilities.

        Pittsburg State currently has an impressive 131 students enrolled full-time in its Graphic Communications program, with an additional 52 minors. Younger added, “While print and packaging are used on a daily basis, most people do not think about the careers involved in producing these items. Helping provide career awareness to students at an early age is key.”

        Companies like Brodnax 21C Printers have started such early education initiatives. Singer’s team has been working alongside PIA MidAmerica to help develop more educational programs for secondary schools. He even recently submitted a letter to the Texas Education Agency to advocate for more print and imaging programs in his area. He said, “Knowledge transfer, continuing education and continuity are going to determine who prevails as a strong printing company in the future.”

        JS McCarthy Print + Packaging has begun offering summer employment opportunities for high school and college students, with the end goal of recruiting for future long-term positions. Tardiff said, “We’ve realized we need to start building our pipeline much earlier. Often, potential applicants picture a dated facility. Once they understand they’ll be working with cutting-edge technology and partnering with well-known brands, people are much more interested in joining our team.”

        For Spectrum Packaging, Periera concluded, “I used to believe that finding good people was difficult, but our shift in mindset, company culture and operational strategies has changed that perspective.”

        Although the industry should not anticipate an influx of skilled pressmen and machine operators, printing and converting companies have numerous strategies they can employ to attract the right talent. Given the success of graphic communications programs at colleges throughout the US, companies can benefit from collaborating with local universities that provide these courses. Most of these programs require internship experience, providing opportunities to build a pipeline of potential employees. Additionally, forming partnerships with local PIA affiliates to create outreach programs targeting high school students is a smart first step toward educating the future workforce about the dynamic and high-tech world of print and packaging. 



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