Our company use to have a pension plan where they would contribute a 3% match to our annual salary. But this plan has now been frozen due to the economic situation. So seeing this was a huge surprise.
Nonetheless before opening the email to continue my pleasant reading, I thought my profit sharing would be atleast 3% or better to make up for the lost in pension.
I opened the email and read the following:
I’m pleased to announce that the Board and senior management team have approved an Employer Discretionary Profit Sharing Contribution (“Profit Sharing Contribution”) to your ABC Company 401(k) Plan account. Despite the challenges of 2009, your hard work helped make it a year of great achievement, and the Profit Sharing Contribution recognizes your efforts.
Here is when my jaw dropped:
You will receive a Profit Sharing Contribution of 1% of your eligible pay.
Really! That was sure a buzz kill... 1%. All I'm getting is a paltry 1% match to my annual salary for this profit sharing. I didn't know whether I should be happy or nonchalent. I understand that 1% is alot considering the size of my company and the number of staff employed. We have a little bit over 250,000 employees so the payout can easily run up into the millions.
But when comparing my company's sudden profit sharing to my husband's company profit sharing, I was downright ambarassed. I don't have the exact percentage, but DH company profit sharing this year was almost 35% of his salary. Then again, DH company size of 3,000 is not as big as mine. So there's more cheese to go around, but I'm just getting the crumbs.
Again, this is discretionary. They have the right not to profit share. I know there are companies out there that don't even offer a company profit sharing plan.
Am I just being plain right ungrateful? Does your company give our such perks?
7 comments:
This is my first year working, and we're receiving a 3.3% profit sharing bonus come mid March. It's not much, but I'll take what I can get. We're sitting at 60,000 employees too.
It sure does not come close to 35% =o
Where do you guys live in SF?
I have family in Walnut Creek and I loooooved visiting them.
My girlfriend and I are considering moving to San Diego in 1-3 years. Any experience down there?
Austin @ Foreigner's Finances
I don't even know if I have that option with my company... but my company is definitely NOT posting profits, so there is none to be shared.
DAVE - 3.3% is a good figure. Way better than what my company is paying out. I think 3.3% is the average raise in US.
AUSTIN - Walnut Creek is such a nice area. We have an office in WC as well. I'm in the DT area financial district. Many of my coworkers live in WC and take the BART transportation over to work.
As for San Diego, my relatives live there as well. I go there to visit atleast once a year. I usually stay in the Torrey Pines area when I'm there. SD weather is always so nice. Wouldn't mind retiring in or nearby La Jolla. But as far as finance jobs go, they really do not have as much as SF. If they did and the pay was high, I sure wouldn't mind living there. Good choice!
INVESTING NEWBIE - Hang in there! I'm sure you will see other perks coming.
I don't even know what profit sharing means.
@Austin: San Diego is wonderful. As long as you have steady/stable income, it's great.
@MoneyHoney: I wonder if the problem is that they have so many employees that it's not feasible for them to have a greater profit-share, or if they're being cautious when right out of the gate in offering the program to make sure they can really sustain it.
Profit-sharing is governed by specific rules and regulations, so they may be trying to avoid overcommitting resources. [trying not to go crack open my textbook right now to review what they are, exactly.]
I've never had the opportunity to participate in profit-sharing, though, so congrats that they've started to offer it!
I guess not all companies offer such incentives as from many of your comments.
I should then be grateful to receive one even if it appears to be a meager 1%.
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