In the heart of the Midwest, a trucking company with a 40-year legacy, 35 employees, and $60 million in annual revenue faced a critical challenge. The company’s owner identified two mission-critical employees, both in their 40s, as instrumental to the business’s growth and stability over the next decade.

Relation Insurance’s Executive Benefits Team was proud to step in as a trusted partner, crafting a bespoke solution that delivered on the owner’s goals:

1. Retain these key employees
2. Deliver immediate tax benefits
3. Provide an enhanced retirement package that would reflect their value to the company.

Understanding the Challenge

The trucking industry is known for its high turnover and competitive landscape, making employee retention an ongoing challenge. The company’s owner recognized that retaining these two key employees was vital for sustained growth and operational success. However, it wasn’t just about keeping them onboard; it was about providing a retirement solution that aligned their personal financial goals with the company’s strategic vision. The ideal plan would need to:

1. Ensure a 10-year commitment from these employees.
2. Offer immediate tax advantages to the business.
3. Enhance the employees’ retirement benefits, reducing long-term tax liabilities and securing their financial future.

Our Customized Solution

The experts at Relation Insurance understood that a one-size-fits-all approach wouldn’t suffice. Here’s how we crafted a tailored strategy to address the company’s needs:

1. Future-Focused Funding: Our team proposed a financial plan to fund the net present value of the owner’s desired retirement amount. This approach ensured the funds would grow over time, aligning with the company’s long-term goals.
2. Strategic Vesting Schedule: We implemented a vesting schedule tied to a 10-year commitment. This ensured that the key employees had a strong incentive to remain with the company while aligning their loyalty with the business’s growth trajectory.
3. Employee-Owned Asset: The plan provided the employees with a valuable retirement asset. Not only does this reduce their future tax liability, but it also offers financial security for their families through capital benefits if an employee passes away before retirement.
4. Tax Efficiency: The company received an immediate tax deduction for the compensation, while limiting employees’ access to cash until the vesting schedule was complete.
5. Simplicity and Scalability: The solution was designed to require minimal ongoing maintenance, freeing up the company’s resources for other strategic initiatives.

The Results

The trucking company quickly began to see the benefits our team’s proposed solution:

• Cost Savings: By leveraging a financial vehicle with growth potential, the company reduced its overall outlay while ensuring significant retirement benefits for its key employees.
• Tax Advantages: The company reaped immediate tax deductions, optimizing its financial strategy and freeing up capital for other investments.
• Enhanced Retention: The vesting schedule effectively secured a decade-long commitment from two indispensable team members, ensuring operational stability.
• Recruitment Tool: The success of the program inspired the company to use this enhanced benefits package as a recruitment strategy. In fact, they are actively using it to attract top talent from competitors.

Your Partner in Retaining Key Employees

At Relation Insurance, we believe that Relationships matter. That’s why we take the time to understand the unique challenges and goals of each client, crafting bespoke solutions that drive results. For this Midwest trucking company, our expertise in Executive Benefits not only secured their future but also reinforced their competitive edge in a challenging market.

If you’re looking to create a benefits package that reflects your company values and employees’, while advancing your business goals, we’re here to help. Let us be your partner in building solutions that work today and for years to come.

Find a Location today to explore how Relation Insurance can help your business succeed.