Temp Agencies Offer 401k Plans
It’s never too late to start thinking about investing in a retirement plan. If you haven’t already done so, you should start maxing out your IRA or ROTH accounts every year.
Did you know that contract attorneys can participate in their legal temp agencies’ 401k plans? I didn’t know they offered these tax deferred retirement plans until a few months ago. Since then I’ve been trying to learn more about them.
Just One 401k Example
There are many of them out there but I’ll just use Compliance Legal Staffing’s 401k plan as an example. Like most of the 401k plans offered by other temp agencies, initial eligibility requires that you work for a certain predefined number of hours for the agency. Compliance is owned by its parent company Vedior. Vedior requires that you work 1,000 hours with them before you can qualify for their retirement plan. Through automatic payroll deduction, you can contribute between 1% and 30% of your eligible pretax income into the plan, which is run by Fidelity NetBenefits.
The good news is that Vedior does match a portion of your 401k contribution, but the match doesn’t vest for several years. According to the plan, Vedior will match 100% of the first $750 that you contribute and 50% of the next $1,500 that you contribute annually. This brings us to the bad news. The maximum annual match is only a measly $1,500. But hey, it’s free money!
If you sign up and work with several temp agencies over a number of months and years, you can strategically max out the matching contribution limits of more than one agency’s 401k plan. I think that would be a pretty smart way to take full advantage of company matching and the tax deferred benefits of 401k’s.
