Valspar Savings & Retirement Plan
This is a defined-contribution plan, with a profit-sharing component, 401(k) feature, and Employee Stock Ownership Plan (ESOP) component.
This plan is in the top 15% of plans for account balances, company generosity, participation rate and total plan cost.
Valspar Savings & Retirement Plan currently has over 5,200 active participants and over $831 million in plan assets.
However, 43% of the holdings in the plan are in Valspar Common Stock. Owning too much company stock exposes you to specific stock risk. When you work at a company, any company, having too much company stock is “doubling-down” on the company.
This is risky. No matter the company, this is risky.
Imagine if Valspar’s stock were to fall, just as you were let go from your job. That’s when doubling-down goes wrong.
There are 24 mutual fund choices in the Valspar Savings & Retirement plan. The plan offers target date funds from State Street Global Advisors.
One thing that many don’t realize about target date funds is that they can become too bond heavy as you get closer to retirement.
We’ve always heard from stock brokers that bonds are “safe.”
In reality, bonds are securities, and all securities involve the risk of loss.
Rising interest rates will cause the market value of your bonds to fall.
Also, in a popping credit bubble, some bond issuers will default, filing for bankruptcy protection and wiping out their bond holders.
Buying a bond is making a loan. Loans aren’t always repaid.
When you stop working at Valspar, you should consider rolling your retirement account to an IRA.
This enables you to stop paying the fees of the Valspar Savings & Retirement Plan and offers you far broader investment choices.
If you’re 59 ½, even if you’re still working at Valspar, you may be able to do an in-service rollover to an IRA now.
You may also be able to continue to add new money to the Valspar Savings & Retirement Plan each payday and still get your company match.
Please contact us if you have any questions. We’re located in O’Hare Plaza, Building 8725, Suite 105.