In late 2017, International Paper and Graphic Packaging entered into an agreement to combine their North American consumer packaging division. It wasn’t an outright purchase, but a transaction that resulting in joint ownership. Moving forward, Graphic Packaging will own 79.5 percent of the partnership and will be sole operator, and International Paper will own the remainder.
One of the side effects is that some employees of International Paper now find themselves ‘involuntarily’ employed by Graphic Packaging. This isn’t necessarily a bad thing, but it does represent a change from what most employees are accustomed to.
One of the big changes will be the 401K plan. The affected IP employees will have to make a change to the Graphic Packaging 401K plan. While this isn’t a comprehensive list of all the relevant factors, here is an interesting look at the International Paper 401K side by side with the Graphics Packaging 401K.
To make the comparison simpler, I’ll break down the hourly and salaried plans individually.
Hourly 401K Comparison
According to Brightscope, the International Paper 401k receives a score of 65 and the Graphic Packaging 401K receives a score of 68. This puts both plans in the ‘average’ category when compared to their peer groups. This score is on a 100 point scale, but even the highest rated companies reach only the mid 80’s.
The International Paper plan is much larger in terms of participants and assets, but both plans are in the top 15% of all retirement plans for total plan cost. This is a big win for the employees since these costs tend to get passed down the line and end up eating up investment returns.
Salaried 401K Comparison
According to Brightscope, the International Paper salaried 401k receives a score of 77 and the Graphic Packaging salaried 401K receives a score of 76. This puts both plans in the ‘average’ category when compared to their peer groups. This score is on a 100 point scale, but even the highest rated companies reach only into the low 90’s.
For the IP Salaried plan Brightscope says, “This plan is in the top 15% of plans for Account Balances, Company Generosity, Salary Deferral, and Total Plan Cost.”
For the Graphic Packaging plan Brightscope says, “This plan is in the top 15% of plans for Total Plan Cost.”
Need More Help?
If you need more help with either of these plans, your benefits department can give you guidance on where to find account balances, beneficiary designations and a lot more.
If you’d like some help outside of your employer or 401K sponsor, please feel free to contact me via this link. I offer prospective clients a free consultation. This is where we discuss your needs and options and then identify the level of service that is right for you.
This article is not intended to give you advice on switching from one plan to another or moving out of your plan into any other retirement vehicle.
Information contained in the article regarding the International Paper and Graphics Packaging 401k plan is based solely on publicly available information as reported on required tax and disclosure forms as of 2017. In addition, information was gathered from other media outlets. Do not base your investment or financial planning decisions on this article alone. Contact your benefits team, tax advisor, and financial professional to discuss your unique situation.