For growing construction companies, the retirement plan that worked in the early days can quickly become a burden. When a firm expands its workforce, what once felt manageable – a collection of SIMPLE IRAs – can create administrative headaches and leave employees without the guidance and investment options they deserve. Twelve Points recently helped one such company make the transition from a fragmented retirement setup to a unified, modern 401(k) plan that serves both the business and its people.
The Challenge
A construction company with approximately 25 employees came to Twelve Points after being referred by their attorney. The firm had been offering SIMPLE IRAs to its employees for years, a retirement vehicle that works well for very small organizations, but had become increasingly difficult to manage as the company grew.
At 25 employees, the company was running 13 to 14 separate SIMPLE IRA accounts. Each time contributions were made, the employer was effectively writing checks or coordinating deposits into more than a dozen different accounts. There was no centralized record-keeping, no unified employee login portal, and no financial advisor guiding employees on how to invest or plan for their future. The plan also offered limited incentive for employee participation and restricted the company’s ability to share profits with its workforce.
The business owner recognized this wasn’t sustainable and that employees deserved more.
Our Approach
When Twelve Points was introduced to the company, we started by taking a comprehensive look at the existing retirement structure. It was clear that SIMPLE IRAs, while appropriate for a much smaller organization, were no longer the right fit. The solution was to consolidate everything into a single 401(k) plan – a move that would simplify administration, improve the employee experience, and unlock additional retirement savings tools.
We worked closely with the business owner to design a 401(k) plan that reflected both the company’s financial goals and its commitment to its employees. The new plan allowed all 25 employees to consolidate into one unified program, with contributions flowing seamlessly from payroll through a record keeper, eliminating the need for manual deposits into multiple accounts. Employees received individual logins, giving them direct visibility into and control over their retirement savings.
We also structured the plan to include a more meaningful employer match, giving employees a stronger incentive to participate and save. The design also opened the door to profit sharing, giving the company the flexibility to reward employees in strong years.
Equally important to the plan design was what Twelve Points brought beyond the paperwork. Not every financial advisor firm wants to engage with a workforce spread across job sites. Our team takes a different approach. We go where employees are: out to job sites early in the morning or during midday breaks, to the office before crews head out for the day. We meet employees where they are, at times that work for them, to make sure they understand their options and feel supported in building their financial futures.
The Results
The transition from 13-plus SIMPLE IRAs to a single 401(k) plan delivered immediate benefits for the company and its employees. Administration became significantly simpler with contributions now handled automatically through payroll, with the record keeper managing the distribution of funds. The owner no longer needs to coordinate dozens of individual deposits.
Employees now have access to better investment options, a more competitive employer match, and a dedicated financial advisor, which are things they didn’t have before. For many workers on the team, it’s the first time they’ve had someone to talk to about their financial goals beyond just their retirement account. The plan also gives the company the ability to add profit sharing contributions down the road, adding another layer of incentive and retention.
Most importantly, employees feel cared for. They know their employer invested in a plan that works for them, and that a team of advisors is willing to show up where they are to help them make the most of it.
The Twelve Points Difference
At Twelve Points, we understand that construction companies have unique needs and a workforce that often gets overlooked by traditional advisors. Our team is committed to serving every employee in an organization, not just the owner or the executives. That means being flexible, showing up in person, and making financial guidance accessible to people whether they’re in an office or on a job site.
In this case, we helped a growing company replace a fragmented, outgrown retirement structure with a plan that works for everyone. If your construction company is ready to upgrade its retirement benefits, or if you’re unsure whether your current plan is still the right fit, contact us to start the conversation. We’d welcome the opportunity to help you build something better.
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