Similar to numerous employees, Mark Zimmermann didn’t prioritize saving for retirement. At 72 years old, he initially believed he would continue managing the family dairy farm in Wisconsin, but things didn’t unfold as expected.
Zimmermann shared, “Farming was a challenge for me, with numerous setbacks preventing me from saving any money. I faced too many disasters and ultimately found myself unable to set aside funds.” Speaking from his current workplace, he reflected on his past struggles.
Presently employed in the manufacturing sector, Mark Zimmermann is engaged in the maintenance of equipment and configuring the sizing for personalized metal components. Given the physical demands of being on his feet at the machines on the factory floor, Zimmermann has opted for part-time work.
Zimmermann expressed gratitude for the opportunity to participate in the 401(k) plan provided by his employer, Mitchell Metal Products. With fewer than 100 employees, the Merrill, Wisconsin-based manufacturer extends this benefit to part-time workers, recognizing the significance of attracting and retaining talent.
Zimmermann stated, “I really appreciate being able to [participate in the plan]. I don’t have a lot of savings built up right now, not compared to what I’m going to need and with inflation with the way it is.”
Tim Zimmerman, the president of Mitchell Metal Products, emphasized the company’s commitment to considering both full-time and part-time employees as their most valuable assets. He highlighted that 84% of the workforce actively participates in the company’s retirement plan.
In 2024, additional part-time employees will gain access to 401(k) benefits.
Only 66% of private-sector workers in the United States currently have access to an employer-defined contribution plan, as reported by the U.S. Bureau of Labor Statistics. Recent legislative changes, featuring tax breaks, aim to facilitate companies in offering this benefit.
These incentives are part of the extensive modifications introduced through the SECURE Act of 2019, further expanded under SECURE 2.0 at the close of the previous year. Notably, the legislation also includes provisions to broaden access to retirement accounts for part-time workers.
According to the original SECURE Act, commencing in 2024, employers are required to extend eligibility for the company retirement plan to part-time employees who work at least 500 hours per year for three consecutive years. SECURE 2.0, effective from 2025, reduces the work requirement to two years. It’s worth noting that companies have already been mandated to grant eligibility to employees who work at least 1,000 hours in a year.
Alterations in legislation, state mandates, and the consistently robust job market are prompting numerous small businesses to reassess their retirement benefits.
Eric O’Donnell, the Director of Product Strategy and Marketing Strategy at Sentry Insurance, a provider of retirement plan services for small and micro businesses, noted, “I think the real value is that we’re having conversations with plan sponsors.”
Expanding eligibility for retirement benefits to part-time workers also initiates discussions about saving and investing with newly qualified employees. O’Donnell emphasized that these conversations assist employees in understanding that retirement plan investing “is for you, and it is something that you should be thinking about; it’s not for the wealthy, it’s for the everyday American.”
