A new U.S. Department of Labor rule could help Mississippi small businesses become more competitive in attracting top talent. MPB’s Desare Frazier reports.
WGK Inc., Engineers and Surveyors in Clinton, Mississippi employs about 22 people. The company provides civil engineering services for water systems to traffic lights. Greg Gearhart, one of the company’s founders says, few leave in part because they offer a 401K.
“If an employee contributes 5 percent we match that with 4 by the time you go through the math and so they’re putting away 9 percent each year of their salary. They’re getting a tax deduction on that,” said Gearhart.
Gearhart says they’re able to provide the benefits through their affiliation with a nationwide professional organization. Financial Advisor Nancy Lottridge Anderson says many small companies can’t afford to provide retirement benefits. But a new U.S. Department of Labor rule would allow small companies to join together to provide a 401K.
“This could open up some doors for them to compete because that’s biggest problem with a small company is you’re trying to compete for employees who might want to go to a larger company where there are more benefits,” said Lottridge-Anderson.
Mae Gremmell manages the 401K program at WGK. She says the new rule will drive down cost. But there has to be oversight.
“Most small companies can’t manage the investments. It’s too complicated. You’d have to hire somebody to manage. You’d have to have a financial advisor on site,” said Gremmell.
According to the U.S. Small Business Administration more than 430,000 Mississippians work for small companies. The rule takes effect September 30th.