DEFAULT INVESTMENT: Principal Trust Target Date
Collective Investment Funds

EMPLOYER CONTRIBUTION: Match of 50% up to 6%

ADDITIONAL PLAN: Not applicable

Dealertrack began to create annual goals for its $128 million 401(k) plan in 2015, and focusing on specific targets has paid off for the plan and its participants.

The Lake Success, New York-based company—which makes integrated Web-based tools, services, and technologies for automotive retailers—worked on the goals with its new adviser, Jania Stout of Owings Mills, Maryland-based Fiduciary Plan Advisors. The sponsor set a 2015 “stretch” goal of getting the plan’s nearly 3,400 participants to contribute at least 6% each, so they could maximize the match of 50% up to 6%.

The sponsor knew that participants need a 10% to 15% total annual contribution to have adequate retirement savings, says Kristin Halpin, senior vice president, human resources. The company chose to focus on the 6% deferral as a starting target, so that with the 3% company match, participants would get a total contribution of 9%. “We also have automatic increases that will kick in and help get them over 10% soon,” she says. As of February, the plan had about 78% of participants maximizing the match. (In October 2015, Cox Automotive, Inc. acquired Dealertrack, and Dealertrack’s employees will transition to the 401(k) of parent company Cox Enterprises, Inc. in January 2017.

The sponsor pinpointed four other 2015 goals for the plan: a 25% participation improvement; getting at least 50% of participants to make a beneficiary election; a 30% increase in rebalancing education and enrollment for participants not in an asset-allocation strategy; and increased participant communications that included more use of easy-to-understand factoids. Participation has risen nearly 5% from 84.57% as 2015 began to 89.14% currently. More than 240 participants not in target date funds got rebalancing education last year. And the plan now has approximately 49% of beneficiary forms.

Pursuing its plan-level goals for 2015 began with a demographic analysis of the company’s diverse workforce that is spread out among Dealertrack’s nearly 30 locations, says Karen Vacchio, senior director, compensation, benefits and HR systems. “We wanted to get a deep-dive understanding of participation in our plan, and see if there was any correlation between locations and job types,” she says. “One of the key findings was that our greatest opportunity was increasing efforts in our two biggest locations, including headquarters. Additionally, we looked at the locations with average deferral rates under 6%, and picked the top five locations to do onsite meetings. By using the demographic data, we could focus our resources to help move the needle.”

At the participant level, the sponsor helped employees focus on the key 2015 goals by creating a one-page handout they received when attending a group education session or one-on-one session, Vacchio says. “The one-pager had a series of checkboxes, and each checkbox tied back to one of our goals,” she says. “The team member would have to check the box that he or she had read the statement next to it. This helped ensure that our team members at least acknowledged the importance of maximizing the match, rebalancing, and having an updated beneficiary on file.” Many participants took action during a meeting, she says. “Having the ability to make those changes on the spot, and the one-pager information sheet, has helped tackle the issue of inertia,” she adds. —Judy Ward

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