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What is Profit-sharing and how is it different than a 401(k) employer match?


Tim Norlin

We often are asked whether Roehl Transport offers a 401(k), and if we offer an employer match. The simple answers are: Yes, Roehl Transport offers a 401k as an employee benefit. While we do not offer a match, we offer something better: Profit Sharing!

Profit sharing & 401k retirement savings expressed as plants growing out of gold coins.

What is Profit-Sharing?

A profit-sharing plan is a way for a company to share the profits with their employees. At Roehl Transport, one of the rewards of a successful year is the additional money an employee receives through the profit-sharing plan. When Roehl has a profitable year, the executive leadership group makes a decision on the contribution to the profit-sharing plan. Roehl Transport has made a profit-sharing contribution every year since the creation of the plan more than 40 years ago. That means the company has been profitable and has shared that profit with their hard-working drivers, technicians, office and training teammates. In 2024, Roehl made a profit-sharing contribution of 5.5% of eligible employee wages. From 2012 - 2024, the average Roehl Profit Sharing contribution is 4.58%.

What is a 401(k) match?

A 401(k) match is an amount contributed by a company that is equal to the amount an employee contributes to their own 401(k) retirement account. Most 401(k) programs with employer match have limits. Many companies limit the match to a percentage of your income. Fidelity Investments notes that the “most common 401(k) match formula on plans at Fidelity is a dollar-for-dollar match on the first 3% and then 50 cents on the dollar on the next 2%.” That means, if an employee contributes 5% of their salary, “they effectively get another 4% from their employer (3% + 1%, or half of 2% = 4%).” In this case, any amount contributed above 5% of your salary is not matched. It’s also important to note that 401(k) employee match plans may have other requirements or variables to be aware of.

How does Roehl’s Profit-Sharing plan compare to a 401(k) employer match?

For our comparison, let’s assume the following:
  • $70,000 in annual income to the driver (the vast majority of Roehl teammates are drivers)
  • 401(k) contribution of 5% of gross earnings (to maximize contributions)
  • Employer match of 4% of gross earnings
In this scenario, the employee will contribute $3,500 of his/her earnings to a 401(k) retirement account.

The employer will match 4% of his/her earnings for a total of $2,800.

The total contribution the 401(k) is $3,500 + $2,800 = $6,300 to the retirement account. That sounds pretty good.

Now let’s take a look at the same scenario except we’ll replace the employer match with Roehl’s profit-sharing program.

The driver again contributes 5% of his/her gross earnings or $3,500.00.

Using Roehl’s average annual profit-sharing contribution of 4.58%, Roehl contributes additional $3,206.

This makes the total contribution to the retirement account $6,706.

That’s $406 more with Roehl’s profit sharing compared to the traditional 401(k) with employer match. Using 2024’s contribution of 5.5%, that difference is $1,050 more than the 401(k) match.

What else do I need to know about profit sharing versus employer 401(k) matches?

A 2023 transportation industry benchmarking study found that, of trucking companies that offer a 401k plan, 70% offered a 1-4% employer 401(k) match. The study also found 5% of trucking companies offered no match at all.

Employer match 401(k) programs require employees to contribute to their 401(k) to get the matched amount, and according to Fidelity, “It's important to note that not all workers contribute enough to get the entire match.”

With Roehl’s profit-sharing plan, even an employee who doesn’t contribute to their 401(k) will receive profit-sharing contribution – that’s one of the benefits of working for a company that shares its profits. Roehl will deposit the profit-sharing funds into a retirement account for the employee, and that simply would not happen at a company that offers a company match since the employee didn’t participate.

In summary, both 401(k) employer matches and profit-sharing plans allow employees to save for their retirement. 401(k) plans require an employee to contribute to get the match, while Roehl’s profit-sharing plan does not.

Roehl’s has made a profit-sharing plan every year since the plan started (more than 40 years ago), and the company is built on values like Safety, Delivering Success and Doing the Right Thing. It’s those values, and the teammates that live them every day, that have made Roehl Transport one of the North America’s safest & most successful trucking companies.

Roehl is growing and investing in our teammates. Learn more about Roehl Transport’s profit-sharing program and all the benefits of working with Roehl!

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