CARMEL, Ind. - Wild Bird Unlimited Inc. is considering ways to extend retirement plan coverage to its nearly 200 franchise outlets and three retail stores owned and managed by its Primary Feather subsidiary.
The 40 staff members in the company headquarters are offered a 401(k) plan, but many franchisees, with just a few employees or many part-timers, have a hard time setting up a high-quality pension plan, said Brian J. Warner, corporate controller.
"As retailers, we can't find enough bodies. We need to help franchisees do anything they can to attract and retain quality people," said Mr. Warner. Wild Birds forecasts its total system will nearly double in size by 1997. To cope with the growth, employee retention is critical, said Mr. Warner.
"We're just at the front end now of the process and are only thinking about it. But we are looking for some way to add pension coverage to the employees of our franchisees. At one end of the spectrum might be something like an endorsed program, at the other, maybe a multiemployer plan," he said.
Wild Bird and Primary Feather franchise or own stores with a nature theme, focusing on backyard bird feeding and bird watching needs.
The company converted an existing salary reduction simplified employee pension plan for corporate headquarters staff to a 401(k) in April. The old program was administered by a local broker and "had really weird, wacko funds I'd never even heard of," said Mr. Warner.
KeyCorp, Cleveland, Ohio, was selected to provide a daily valued, bundled 401(k) plan with six options. Three options - a guaranteed investment contract, bond and balanced funds - are managed by Key Trust. The three other options are the Magellan, Growth and Income and International Equity funds managed by Fidelity Investments Institutional Services Co., Boston.
Mr. Warner already had used KeyCorp's 401(k) bundled program, Prism, at a previous employer, and said he was convinced of the need to use a bundled provider with high-quality record-keeping services. "In my previous jobs, where I used to audit 401(k) plans, I never saw an unbundled plan work well 100% of the time. We definitely wanted a single trustee and record keeper which had complete control of our employee data."
Employees have moved from the primitive services available with the salary reduction plan to a fully automated voice-response system, unlimited transaction capabilities and user-friendly quarterly statements.
Wild Bird Unlimited is lucky in having a fairly homogenous corporate staff, said Mr. Warner. Most are company executives and none earns less than $30,000 per year. "A good pension is a definite tool to help us keep and retain good employees. We are young, growing fast and are trying to attract very qualified employees from other companies. We cannot not offer a 401(k) plan to new employees who are of the caliber we are looking for," he said.
Thanks to an employer match of 50% on the first 6% of an employee's contribution, and to a strong educational campaign, participation in the plan is 98%. Most employees contribute well above the minimum 6% investment (their ceiling is 20% of salary).
Assets in the 401(k) total $35,000, but are growing rapidly. More than $8,000 was contributed to the 401(k) plan in its first two months; not a bad deferral total for such a small company.
The company pays for all plan expenses. If the company succeeds in adding more corporate-owned stores and allows those employees and those from franchise stores to join the plan, the cost per participant will drop sharply. "It's a little more expensive now, because balances aren't really high yet. But as the individual accounts grow and we add staff, we'll begin to see lower per-head costs for plan services," said Mr. Warner.
