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PLAN SPONSOR OF THE YEAR Finalists

Corporate 401(k) >$250MM - $1B

Hoag Memorial Hospital Presbyterian

Jan Blue

TOTAL PLAN ASSETS/PARTICIPANTS: $515.4 million/6,686

PARTICIPATION RATE: 95.9%

AVERAGE DEFERRAL RATE: 8%

DEFAULT DEFERRAL RATE: 3%

EMPLOYER CONTRIBUTION: 50% match on 4%, plus 3% nonelective; additional contribution for employees with 10-plus years of service

Hoag Memorial Hospital Presbyterian’s work force, with the wide-ranging educational backgrounds and income levels typical of a hospital, also has an average age of 40, average tenure of eight years, and is 75% female. The 401(k) plan for this employer, in Newport Beach, California, has managed to reach 95.9% participation and 8% average deferrals by offering a generous employer contribution, utilizing automatic design features and providing individual financial counseling for employees. 

The plan matches 50% up to 4% of pay an employee defers. Employees also become eligible for a 3% nonelective contribution, effective the January 1 following 12 consecutive months of employment during which they have worked 1,000 hours or more. Additionally, Hoag makes an extra contribution for employees with 10-plus years of service. “We have many employees who have been here 15 years or more,” says Jan Blue, senior vice president, human resources (HR) and support services.

“It’s important to us to reward them for continuing to choose [us] as their employer and hopefully help them retire with a nice nest egg after their providing Hoag with service for all of those years.” The extra contribution for long-tenured employees ranges from 0.5% for 10 through14 years to 3.5% for 25 years or more.

The plan’s 2012 design changes also helped both new and existing employees to up their contributions. Automatic enrollment features began at a 3% initial deferral for new hires that year, plus the plan auto-enrolled previously eligible, noncontributing employees at 2%. “These employees also were included in the automatic contribution accelerator of 1% per year, unless they chose to opt out,” Blue says.

Auto-enrollment has led to improved investment diversification, as 67.2% of participants have money in the plan’s default investment, GoalMaker. The asset-allocation program from the plan’s recordkeeper, Prudential, provides professionally managed allocations and portfolios. “In an organization with schedules that cover 24/7/365 and that never closes, employees usually don’t have the time or interest to research investments, monitor different funds’ returns and ensure portfolio balancing,” Blue says. Using Goalmaker, “they can have peace of mind with respect to their retirement savings and focus on their patients,” she says.

Hoag also picks up the cost for personalized financial counseling offered by the plan’s adviser, Retirement Benefits Group (RBG). The advisory firm comes on-site monthly to hold financial-planning sessions, with appointments available throughout the day. “Employees can schedule one-on-one sessions with a financial planner for 45 minutes,” says Tanya Barrett, Hoag’s executive director, human resources.

“They also are able to schedule a session outside of Hoag directly with our retirement consultant, if that works better for their work schedule. These sessions are very popular and typically are entirely booked up within two or three days of communications sent out to employees,” she says.

Having one-on-one sessions seems to have motivated the participants who attended the meetings. "We don’t have hard statistics," Barrett notes, "but we estimate that 75% take some action, such as increasing their contribution, changing their investment allocation or rolling assets into the plan." —Judy Ward

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