To attract family-oriented workers, fast-growing Dun & Bradstreet Credibility Corp., an aggressive California-based firm that does credit ratings on small businesses (and offers to "monitor and control" their credit records, for monthly fees of $69 to $149), has implemented a federal 529 college-savings plan for its 600 employees -- with a few twists:
- DBCC will match employers' savings, doubling their value, up to $1,000 a year for hourly workers, $2,500 for salaried employees.
- DBCC will pay workers to compensate for the tax they have to pay on the income they contribute to the 529 plan. Withdrawals (for tuition payments) are tax-free under the federal program.
- The company will make a second match in the form of a dollar-for-dollar gift, in the amount of employees' contributions, to the public school sytems in Bethlehem, Pa., and five other cities where DBCC has operations.
DBCC employs 600 nationwide, including 150 in Bethlehem, the rest in Short Hills, NJ, and at sites in Arizona, California and North Carolina.
The Bethlehem site opened three months ago, DBCC chief executive Jeff Stibel told me from the company's headquarters in Malibu, Calif. (He says Malibu is an excellent place to base a company if you like to surf.)
Stibel, who joined Great Hills Partners of Boston in a $100 million takeover of the former Dun & Bradstreet Corp. unit two years ago, says he picked Bethlehem for the new office because of its educated and "culturally diverse" workforce, its proximity to Philadelphia and New York, and the city's "obvious desire" to recover from its long post-factory depression by courting new industries. DBCC did not receive a state subsidy, Stibel told me: "We didn't ask for one, either."
Saying he's proudly "over-educated" -- Stibel has degrees from Brown and Tufts, and trained in neuroscience before serving as chief executive of Web domain assigner Web.com -- Stibel says he thinks kids' college tuition "should be more important than retirement" for more workers. He also thinks DBCC has an obligation to "serve our communities" by backing the local public schools: "These kids will be our employees in 20 years."
DBCC calls this the "first ever" dual matching 529 tuition savings program. Certainly it is one of the first 529 matching programs of any kind started since federal rules promoting such programs were enacted last year.
DBCC calls the program EdAhead. It's administered by Putnam Investments, a Boston mutual fund company and the only one of a dozen retirement investment firms DBCC contacted "who told us, 'We can do a program like that,'" Stibel said. "We'd like to see more companies do this."