Making a 401(k) Plan Work

With more than $4 million in sales in 2001, 12-year-old Blackdog Design/Build/Remodel in Salem, N.H., might be better able than smaller remodeling companies to fund a retirement program for employees. But owner David Bryan started the program when the company was smaller because he wanted to provide an increasing amount of benefits.

Blackdog offers vacation days, well days (a variation of sick days), a bonus program for production workers, an annual company party, tool-purchase assistance, company vehicles for certain field employees, and ongoing education and training. It also offers a 401(k) retirement program with a 40% company match.

When Bryan was first considering a pension plan, a past customer referred him to the local office of international financial firm Salomon Smith Barney. In 1998, he established a 401(k) plan with no required company match, switching to the 40% match in December 2000. Today, the required match costs Blackdog about $30,000 per year for its 36 employees, plus approximately $2,000 per year for plan administration paid to Smith Barney.

While conceding that the plan is “more hassle than I wish at times,” Bryan realizes how valuable retirement saving is not only for himself and his family but for his employees. And with sales for 2002 projected to reach more than $5.5 million, Bryan’s employees apparently are responding in kind.