A Guide to P&G's Retirement Plans

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As a Procter & Gamble (P&G) employee, you’re equipped with two retirement plans to secure your financial future: the Profit Sharing Trust & Employee Stock Ownership Plan (PST Plan) and the Savings Plan. Understanding how these plans work—and how to make the most of them—can set you on the path to a confident retirement.


The PST Plan: Building Wealth Through Company Ownership

The PST Plan is a hallmark of P&G’s commitment to its employees, offering a company-funded path to long-term wealth accumulation and ownership.

  • Annual Company Contributions: Each year (July 1–June 30), P&G contributes to your PST account in the form of cash for Common Stock and, if eligible, Preferred Stock shares. This aligns your financial growth with the company’s performance.

  • Stock Details: Common Stock is allocated at its market price on the purchase date, while Preferred Stock (no longer issued after 2024) retains a fixed cost basis of $6.82 per share—a valuable feature for future tax planning. 

  • Diversification at Age 50: Once you reach age 50, you gain the flexibility to diversify your PST holdings, provided you maintain at least 40% of your account in P&G stock. This allows you to balance company loyalty with prudent risk management.

  • Vesting: You become fully vested after four years of service plus 1,000 hours in your fifth year, or immediately upon reaching age 65, disability, or death—rewarding your long-term commitment to P&G.


The Savings Plan: Your Flexible 401(k) Option

The Savings Plan empowers you to take an active role in your retirement savings, complementing the PST Plan’s company-funded benefits.

  • Employee Contributions: You have the flexibility to contribute either pre-tax or Roth 401(k) dollars directly from your paycheck—up to 50% of your pay or the IRS annual limit ($23,500 in 2025, with additional catch-up contributions available if you’re age 50 or older). Please note that Highly Compensated Employees may be subject to lower contribution limits than the IRS maximum. Automatic enrollment makes it easy to begin saving, but you can adjust your contribution rate or opt out at any time.

  • Immediate Vesting: Every dollar you contribute is 100% yours from day one, with no waiting period.  

  • Investment Choices: Select from 12 investment options to build a portfolio that matches your risk tolerance and retirement goals, including funds beyond P&G stock.  

  • Rollovers: Easily consolidate retirement assets from previous employers or IRAs into your Savings Plan account, with no rollover fees, for streamlined management.


Maximizing Your P&G Retirement Plans

To make the most of your retirement plans, consider these best practices: 

  • Leverage Both Plans: While the PST Plan grows through company contributions, supplementing it with your own Savings Plan contributions can accelerate your retirement savings. 

  • Stay Informed: Take advantage of P&G’s plan guides and the Financial Education Center to deepen your understanding, or consult with a financial advisor who specializes in P&G benefits.

  • Review Regularly: Periodically reassess your Savings Plan investments to ensure they align with your evolving goals and risk profile.

  • Monitor Company Performance: Since the PST Plan is tied to P&G’s stock, keep an eye on company performance and consider diversification strategies as you approach retirement.

P&G’s retirement plans offer a strong foundation for your financial future. By understanding and actively managing your PST and Savings Plans, you can build a resilient retirement portfolio tailored to your unique needs.

Navigating these plans can be complex. Vaultis Private Wealth specializes in helping P&G employees maximize their unique benefits. Our team provides personalized advice to align your retirement strategy with your long-term goals. Contact us today to enhance your retirement planning and secure your financial future.


Disclosures:

The information in this blog is for educational purposes only and is not intended as personalized financial, investment, tax, or legal advice. The retirement plans discussed may not be suitable for everyone, as individual goals, risk tolerance, and circumstances vary. Consult a qualified financial advisor, tax professional, or legal advisor before acting to evaluate your situation. Past performance does not guarantee future results, and investments involve risks, including potential loss of principal. Tax laws may change, potentially affecting these plans; this content reflects information as of September 28, 2024. Vaultis Private Wealth is not affiliated with Procter & Gamble, which does not endorse this content or compensate Vaultis for any services.