Why Is It Important?
Your workforce is the engine of your co-op’s success. But while your team members are doing their jobs, who is helping them with their financial needs? Co-op executives often tell us they want to do more to support and strengthen their employees by helping them reduce financial stresses and build wealth for their futures. You can help employees and their families tackle a top financial challenge — not being prepared for an emergency — while building employee loyalty with an additional post tax-benefit.
The Employer-Sponsored Savings Program is a simple, low-cost way for co-ops to encourage employees to save. The co-op provides the motivation by supplementing saved funds up to a level the co-op is comfortable supporting.
Our Role
Homestead Funds has the account types, investments and guidance to help foster the long-term success of your cooperative. When you open an account with Homestead Funds, you choose how to invest across our family of mutual funds according to your cooperative’s tolerance for risk and expected time horizon. Investing poses risks, including the risk of loss, but it provides the opportunity to earn a return above what is typically available on stable-value funding vehicles.
An Individual or Joint Account Application is used by the employee to open the account when participating in this program.
Establishing an Employer-Sponsored Savings Program
The program is simple to set up with a few defined steps for all parties. More details are available in the Employer-Sponsored Savings Program brochure.
Your Regional Relationship Manager can assist you with the process to establish the program.
| The Co-op | Homestead Advisers |
|---|---|
| Determines if the co-op will put payroll deductions into a mix of funds as directed by each employee or will limit the deductions to the Homestead Funds Daily Income Fund for simplicity | With the co-op’s permission, hosts an all-employee initial rollout meeting to speak about the program, educate on the importance of savings and walk through the steps to open accounts online |
| Inform employees, promotes the program internally, and provides Homestead Advisers with a list of names and email addresses for employees who want to participate | Contacts participating employees and provides them with Homestead Funds information and instructions on opening a Homestead Funds account |
| If the co-op wants to receive account balances, enters into a confidentiality agreement with Homestead Funds | Tracks the employees’ consent to share information if the co-op wants to verify Homestead Funds account balances and/or redemption activity annually |
| Sets up employee payroll deductions using Homestead’s instructions | Provides employee Homestead Funds account balances and/or redemptions to the co-op annually, if necessary |
| Submits regular match through payroll deduction | Communicates to the employee about additional Homestead Advisers resources to build a diversified portfolio |
Once program details are determined, we recommend that cooperatives review them with their legal counsel and tax advisors, as Homestead Advisers and Homestead Funds do not offer legal or tax advice. In our experience, it takes approximately two to three months to implement the program.
As a money market fund, the Daily Income Fund has limited potential for income production. You could lose money by investing in the Fund. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the Fund is not a bank account and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The Fund’s sponsor is not required to reimburse the Fund for losses, and you should not expect that the sponsor will provide financial support to the Fund at any time, including during periods of market stress.
Important note: An Employer-Sponsored Savings Program invested in Homestead Funds is not a qualified plan and has no relation to any retirement plans that may be offered by the cooperative.
Related Resources
- Homestead Advisers Employer-Sponsored Savings Program
- Homestead Funds Individual or Joint Account Application
- Homestead Funds Mutual Non-Disclosure Agreement
- Homestead Funds Consent to Disclosure
- Homestead Funds Employer Instructions to Submit Funds
- Homestead Funds Group Purchase Form
Asset allocation and diversification do not guarantee a profit or protect against a loss in a declining market. They are methods used to help manage investment risk.
Your Regional Relationship Manager can assist you with the process to open the account.
Brian Allen
NATIONAL RELATIONSHIP MANAGER; INVESTMENT ADVISOR REPRESENTATIVE; AND REGISTERED REPRESENTATIVE
Mark Edwards
REGIONAL RELATIONSHIP MANAGER; INVESTMENT ADVISOR REPRESENTATIVE; AND REGISTERED REPRESENTATIVE
Stephanie Mills
REGIONAL RELATIONSHIP MANAGER; INVESTMENT ADVISOR REPRESENTATIVE; AND REGISTERED REPRESENTATIVE
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