Plymouth
Tube reinvigorates its 401(k)
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Diane Augustine's401(k) plan has its own $1 million man.
Plymouth Tube
's retirement planning hero has not come from
life-threatening tragedy to fight evil. Rather, Jerod
Ganster, a 22-year-old machinist with the suburban Chicago
manufacturer of specialty tubing products, has become a
living example of a successful plan turnaround that not
only has more employees participating, but also has them
downright excited about doing it. Ganster, who works at
Plymouth Tube's Hopkinsville, Kentucky, Extruded Shapes
Mill, has set a lofty $1 million goal for his 401(k)
account when he retires—a goal inspired as a result of a
dramatic new team approach to participant education and
involvement.
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Seeing employees that dramatically engaged with
Plymouth Tube's retirement program has also fueled the
enthusiasm of Human Resources/Support Services Manager
Diane Augustine. "I like to see our numbers going up
and people getting into the 401(k)," she says.
"It's exciting to see the light bulbs [going
on]." That is not all that is going on—and up. The
plan has a participation rate that has skyrocketed to more
than 90% of Plymouth Tube's 845 employees from a tepid
64.1% in 2002—numbers that speak volumes as part of the
"after" portion of the company's 401(k)
success.
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Not so long ago, Plymouth Tube's education program
was sporadic and offered in a general one-size-fits-all
style. Perhaps as a result, nearly half of the plan's
assets ($16.8 million as of October 2002) were in a
stable-value option: "[Participants] were of the opinion
that 'I'm not going to lose money there,'" Augustine said,
"but they also weren't going to save for retirement there
[either]."
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The plan's Fiduciary Committee, looking to improve on
those results, called on the expertise of long-time advisor
Jim O'Shaughnessy, now co-principal of Sheridan Road
Financial in Northbrook, Illinois. In the process of
narrowing the list to roughly a half-dozen possibilities,
Augustine recalls, "Through the search, we discovered that
there were providers that could offer us more investment
options, better service for participants, and better
technology." In January 2002, after about a six-month
process, Plymouth Tube converted to Boston-based Putnam
Investments.
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Almost immediately, Augustine said, Plymouth Tube
began realizing benefits from the new three-way
relationship since O'Shaughnessy already knew the Putnam
team and could immediately begin helping the plan make
maximum use of Putnam's advisor-driven system.
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Tracy Tierney, who was Putnam's relationship manager
for Plymouth Tube after the conversion, agreed that having
an effective advisor helped Augustine complete the
conversion and has helped Putnam provide the most carefully
targeted services.
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The first order of business was getting more of
Plymouth Tube's employees into the plan, helping them save
enough, and, ultimately, investing those savings with the
greatest chance of success—i.e., with a proper asset
allocation.
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Augustine said that the plan quickly began revamping
Plymouth Tube's participant education efforts to employees
at the company's seven mills in six states, including both
union and non-union sites.
The Plymouth Tube team determined that it would be better
to present general employee sessions, as well as smaller
events targeted to specific issues, including taking a plan
loan, asset allocation, and saving for retirement.
Significantly, the firm chose to make those meetings
mandatory—in part to make a point to the attending
employees about Plymouth Tube's commitment to the
program.
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"It is a big deal for us to shut down a mill for a
meeting, so it just goes to show our employees how
important we believe the meetings are," Augustine explains.
"I think it played an important part in getting the word
out to our employees on the importance of saving for
retirement."
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A key element in Plymouth Tube's meeting success lay
with the presenter: in most cases, advisor Dan Lundquist,
an O'Shaughnessy colleague at AXA Advisors. By hosting
meetings, and conducting one-on-one sessions with
individual employees, Lundquist developed a level of trust
with the Plymouth Tube workforce that dramatically ramped
up workers' willingness to learn the material, and
reinforced their belief that Lundquist would steer them the
right way, according to Augustine. According to Putnam's
Tierney, the proof of that success lay in the numbers:
Eight out of 10 employees who attended a Plymouth
Tube-sponsored meeting subsequently enrolled in the
plan.
Adding the one-on-one sessions with Lundquist also
was key to convincing people that it would be safe for
them to engage with the company's retirement savings
program. Recalled O'Shaughnessy: "That's where we saw the
big shift in gaining the trust of the employees."
Augustine agrees. "Dan helps them get a little peace of
mind," she said. "[Employees say] 'Hey Dan!' They have
that relationship with him."
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