Summit names new VP sales
Summit Chemical Co., manufacturer of environmentally responsible products for landscapes and ponds, has promoted Bill Hoffpauir to the post of VP sales.
Hoffpauir is responsible for national sales activities for Summit’s retail product line marketed under the brand name Summit Responsible Solutions.
In his new capacity, Hoffpauir will work with distributors, retailers and manufacturers’ representatives to provide them with sales information and support, focusing primarily on top-selling Summit products including Mosquito Dunks and Clear-Water Barley Straw, and several others.
Hoffpauir joined Summit in 2007 as regional sales manager. He was responsible for the East Coast and southern regions of the country, coordinating the sales and promotional activities.
“We are absolutely delighted to have someone of Bill Hoffpauir’s experience and expertise overseeing our national sales operations,” said Jonathan Cohen, president of Summit. “Bill will work to further expand the distribution of our products into retail stores and make consumers aware of the value and reliability of Summit Responsible Solutions products.”
Prior to joining Summit, Hoffpauir worked for Central Garden and Pet as a distribution manager in multiple locations throughout the United States.
Thresholds drive 401(k) participation more than rates
In a 401(k) or similar defined contribution plan, the “threshold” is the limit at which participant contributions are matched by the employer. According to a new report, a higher match rate (for instance, offering an employer match of 80%, rather than 50%, of an employee’s contribution up to 6% of salary) has only a small effect on savings plan contributions. In contrast, raising the match threshold (for instance, matching 50% of an employee’s contribution up to 10% of salary, rather than up to 6%) has a substantial impact.
That’s probably because “[the threshold] serves as a natural reference point when individuals are deciding how much to save, and may be viewed as advice from the savings program sponsor on how much to save,” according to Brigitte C. Madrian, the Aetna Professor of Public Policy and Corporate Management at the Harvard Kennedy School of Government. She is the author of a July 2012 report, Matching Contributions and Savings Outcomes: A Behavioral Economics Perspective, from the National Bureau of Economic Research, a nonprofit organization that undertakes economic research on behalf of public policymakers, business professionals and the academic community.
Moreover, changing the matching formula from 50% of the first 6% of salary to 25% of the first 12% of salary would not increase the cost to the employer but is likely to result in employees saving more — although without effective communications there is a risk that employees might perceive the lower rate/higher threshold as a match reduction.
The report reviewed a large body of research literature focused on encouraging individuals to increase their savings. The approaches undertaken included changing the structure of the match within a savings plan and introducing variations in which some individuals were offered a more generous match than others.
Default contribution rate impacts savings
While including a matching contribution increases 401(k) savings plan participation and contributions, it has less impact than implementing automatic enrollment or taking other behavioral approaches, according to Madrian’s research.
“Behavioral approaches to changing savings plan outcomes — including automatic enrollment, simplification, planning aids, reminders and commitment features — potentially have a much greater impact on savings outcomes than do financial incentives, often at a much lower cost,” she observed.
By far the most effective method to increase participation in defined contribution savings schemes is automatic enrollment, the research indicated. “Matching is not completely irrelevant in plans that have automatic enrollment. A more-generous match is associated with higher participation rates,” Madrian found.
Automatically enrolling new employees into employer-provided 401(k)s, 403(b)s and other defined contribution plans is becoming more popular (used by 39% of employers, according to the Society for Human Resource Management’s 2012 Employee Benefits survey report).
However, “Although automatic enrollment leads to unambiguous increases in savings plan participation, its effects on savings plan contributions depend very much on the default contribution rate at which individuals are automatically enrolled,” Madrian noted. “Just as the match threshold for savings plan contributions attracts the largest share of savings plan participants when there is a match, so too does the automatic enrollment default contribution rate when there is automatic enrollment. Contributions are higher with a higher default contribution rate under automatic enrollment than with a lower default contribution rate.”
For instance, in one study that Madrian described, “with a default contribution rate of 6% of pay, which coincides with the match threshold, almost half of employees contribute 6% of pay to the plan.”
Stephen Miller, CEBS, is an online editor/manager for SHRM.
Have HR-related questions and concerns? Get access to essential forms, policies and guides, plus a live call center, at ToolkitHR.com, powered by HCN and the Society for Human Resource Management (SHRM).
Stanley Black & Decker makes Asian acquisition
Stanley Black & Decker has agreed to acquire Infastech, a global manufacturer and distributor of specialty engineered fastening technologies headquartered in Hong Kong, from CVC Capital Partners and Standard Chartered Private Equity Limited for $850 million in cash. The transaction, which is subject to customary closing conditions, including regulatory approvals, is expected to close in the fourth quarter of 2012.
With revenues of approximately $500 million and more than 2,000 employees, Infastech is one of the world’s leading producers of engineered mechanical fasteners and one of the largest Asia‐based global players in the specialty mechanical fastener market, according to the press release announcing the deal.
More than half of Infastech’s 2011 revenues were generated in the Asia-Pacific region and once combined with Emhart, Stanley Black & Decker’s engineered fastening platform, the enlarged business will generate close to 40% of its revenues from this high growth region.
“Infastech is both a highly accretive acquisition and a perfect strategic fit for Stanley Black and Decker. It adds to our strong positioning in specialty engineered fastening,” said John F. Lundgren, president and CEO of Stanley Black & Decker.