Precision Associates

Before Bradley Kadue joined his family’s Minneapolis-based manufacturing business, Precision Associates Inc., he worked as an auditor at Deloitte, completing clients’ financial audits and benefits statements.

Over his years of filing Form 5500s in that role, he developed an understanding of the key components of a retirement plan, so when he took over as Precision’s president, he wanted to be actively engaged in the design of the 401(k) plan.

Precision makes molded rubber valves, seals and other products for use in industries such as medical equipment and food processing. There are 276 participants in the 401(k) and profit-sharing plan and $13,320,000 in assets. Kadue expresses pride that the company requires all new employees to attend a 401(k)-enrollment meeting, and he says Precision aims to provide “intensive individual employee education.”

When he encountered a 64-year-old employee who was not contributing to the plan, and therefore not receiving the full company 3.5% match, he was eager to understand why. Learning that the employee felt it would “take too long for their own contributions to amount to much,” Kadue says, made him think.

“We know our employees well—we know their families—and I want them to understand” what the retirement plan can offer them, Kadue says. “I talk to the opt-outs to make sure they understand what they could be giving up.”

The company’s workforce is nearly 94% hourly, 92% are full-time workers. For many, English is not their first language.

Kadue and his team partly credit the 401(k)—in which 83% participate—for the average 8.78-year employee tenure; the plan has been in existence since 1991, he notes.

“Specifically I feel we do an excellent job of getting participation from demographics which have traditionally been underserved in terms of the teaching of financial literacy, and participation with long-term financial management. We invest a great deal of time and resources in educating our employees as to the benefit of retirement savings, and hold their hands as they navigate systems where there has been little knowledge and often outright mistrust,” he says.

When the company received a Paycheck Protection Program loan during the COVID-19 pandemic, even as business remained strong, Kadue found a way to share that company windfall with plan participants and to try to address the small-account obstacle he had identified.

Working with plan adviser Jessica Ballin, principal at 401k Plan Professionals, “we used that [money] as an opportunity to overcome the barrier to entry and prefund some employee accounts,” he says.

The move exemplifies a company tradition of helping participants jump start their account through sizable nonelective lump-sum contributions, the company wrote to PLANSPONSOR.

Precision, in January 2022, made a flat contribution, in the form of profit sharing, of a percentage of pay for all eligible participants. The minimum contribution was $750 per participant.

“We gave people something to build on,” Kadue says.

While the company has yet to make a similar effort in 2023, Kadue says it is looking hard at last year’s methodology in hopes of giving another “meaningful” contribution before December 31.

To make the 2022 contribution required a plan design change that Precision’s committee, working with recordkeeper Empower Retirement and Ballin, enacted in 2021, after bringing it to a quarterly fiduciary meeting.

Ballin says making the decision was in character for the company, which “has always been employee first.”

“They are always being creative. They are always pursuing ways of moving the needle,” she says. “They don’t just want to do the norm.”

—Amy Resnick