Considering a Switch in Leadership Roles? Essential Topics to Ensure You Retain Your Money: Part I

Switching Leadership Roles Essential Checklist

You’re comfortable in your current marketing leadership role, but lately, you’ve thought that you may be ready for a new challenge. Before you can even consider switching marketing leadership roles, you need to ensure that the money you’ve invested and acquired into your 401(k) or profit-sharing plan is secure before making a transition. 

You’ll want to have answered many questions before feeling financially confident, leaving your current position. I’ll answer many of these questions in this new five-part series: Considering a Switch in Leadership Roles? Essential Topics to Ensure You Retain Your Money.

Explore the challenges below in Part I and check back on the Celarity blog in mid-January for the full series!

Without further adieu, Part I:

Switching Marketing Leadership Roles: The Challenges

There are four significant challenges you will want to address before you switch marketing leadership roles:

  1. Can you make a marketing leadership change without losing your full compensation, including salary and other financial incentives?
  2. When is the right time of the year to make a change to your leadership role to soften the impact within your total compensation?
  3. How long will it take to find a new marketing leadership role and onboard when you start looking?
  4. How can you ensure proper compensation for the money you leave on the table if you decide to depart before being fully vested?

Questions Regarding Your Plan Structure

Let’s begin Part I of this series by taking a closer look at question one: can you change marketing leadership roles without losing your full yearly compensation?

The best place to start is to determine the following:

  • How is your current compensation plan structured?
  • Is there a corporate vesting period that you need to be aware of?
  • Is there a partial payout option, even if you don’t stay until the full vesting date?

Common Profit-Sharing Methods

There are many ways your company may have customized the structure of your your 401(k) or profit-sharing plan. Some of the most common methods include:

  • Salary Ratio: the company’s contributions are a flat percentage of each employee’s salary. 
  • Integration (or Permitted Disparity): allows a plan sponsor to provide higher contributions for eligible participants who earn amounts over a set threshold, as long as the “permitted disparity rules” of IRC Sec. 401(k) are satisfied.
  • Age-Weighted: employer contribution to the plan based on factors that combine compensation with deferred annuity factors, including age. 
  • New Comparability: plan sponsors are allowed to define and assign employees to different contribution “rate groups” within the plan.

401(k) Matching Facts

If you depend solely on traditional 401(k) matching, here are some facts from the National Compensation Survey:

  • The medium match is 3%
  • 41% of companies match a percentage of employee contributions between 0-6% of salary
  • 10% of companies match a percentage of employee contributions at 6% or more of salary
  • 22% of 401(k) matching vests immediately, but that 22% are ‘cliff’ vesting schedules (these plans require you to stay with an employer for a minimum number of years, or you don’t get any of the matches)
  • 47% of companies have a ‘graded’ vesting schedule – plans vest the match with every year of service until you’re 100% vested (usually at 5 years)
  • 32% of employers don’t allow you to contribute to the plan unless you’ve been with an employer for a minimum of a year

Need Additional Resources Before Changing Marketing Leadership Roles?

If you’re unsure how your profit sharing or 401(k) is structured, I suggest you review the contract you signed and any documents you received during your on-boarding at the company. If you still have questions, consider contacting an external expert such as your financial advisor or tax accountant. As a secondary option, if you need additional clarity about your employer’s specific plan, you can confidentially contact the appropriate HR person at your current company.

Now, to answer that one burning question: will you lose compensation if you decide to switch marketing leadership roles? The answer is that you don’t have to. If you take the right steps, you won’t lose a dime. I can help you ensure you won’t lose a dime! 

Sign-up for the Celarity INSIGHTS e-newsletter and follow Celarity on LinkedIn. We’ll notify you when the rest of the series hits the Celarity blog in mid-January!


Kimberly Brown-Gordon, Lead Recruiter at Celarity

By Kimberly Brown-Gordon, Lead Recruiter

Kimberly Brown-Gordon has been working within the staffing & recruiting industry for  8+ years. Kim is currently the Lead Recruiter at Celarity, a marketing recruiting agency that has led the local creative industry for over 27 years. She specializes in placing executive level candidates in unique opportunities, both locally and nationally. Kim’s colleagues and past placements love working with her because of her genuine approach to making an initial connection and continuing to build those relationships.

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