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Don't make the common mistake of building a long vesting schedule into your company's retirement plan in
hopes of discouraging employee turnover. You just may be successful - giving unmotivated employees a reason to hang on when they should be
replaced.
One company that has avoided this pitfall is Sonalysts Inc., an operations- research firm in Waterford, Conn.
Shortly after the company was founded in 1973, the company instituted a pension plan with an exceptionally short vesting period- 25% a year, up
to 100% in four years. Thereafter, employees could take the money and run. Most haven't. "Our turnover is very low for our
business." says Muriel Hinkle, president of the 300-employee firm. The program has helped the company attract top employees, she adds, and
they stay because they like ht work , not because they're waiting to collect their retirement benefits. |
