Back in 2013, truck dealership JX Enterprises, which is headquartered in Hartland, Wisconsin, embarked on a journey to drive engagement within its 401(k) plan. By the end of last year, the company had seen its participation rate climb to 93.7%. The average deferral rate rose to 7.19% compared with 5.32% during the same period in 2013, and 80% of associates now have a positive retirement forecast.
The firm credits its success to its redesigned educational program.
“Our organization has taken a proactive approach to helping our associates secure their financial future through a number of initiatives. We had a hard time getting people to enroll,” recalls Vice President of Human Resources (HR) Richard C. Yezzi Jr. “Nobody ever really talked about the 401(k) plan. Everyone, especially people who were here for several years, was skeptical about the plan. There wasn’t a good understanding of it, and we weren’t doing anything to drive engagement and understanding of what it could mean for employees.”
To turn things around, the company reached out to advisory firm UBS Institutional Consulting Group and recordkeeper Transamerica Retirement Solutions to create an ongoing educational program. This now starts with a live 401(k) seminar for all new employees at company headquarters and covers the basics of a 401(k), the different investment options available and the importance of saving early.
“We hire a number of young folks, and we want them to see the power of compound interest and how just a little bit of money now can turn into a lot of money in the future for them to put toward a secure retirement,” says Yezzi. “If they can’t do much now, we recommend they start with 1% and then increase it.”
The educational initiative continues throughout the year with live webinars on topics such as “Investing 101,” “It’s Not Too Late to Start Saving,” “The Power of “Change” and “Be a Super Saver”—a label it reserves for those who defer at least 10% of salary. These sessions are recorded and later posted on the company’s intranet.
To reinforce the fundamentals of budgeting, saving and other financial obligations, the firm instructs by way of a variety of media—digital and print newsletters, email, snail mail, etc.
This approach works well for JX Enterprises, considering the company has employees from multiple states, and some work overnight shifts.
“With 21 locations spread across four states, we have a diverse and scattered population,” explains Yezzi. “Even in this digital age, that can make communication difficult. Add onto that our 24-hour operations, … and that makes ensuring that we take the time to talk to our associates about their own long-term futures all the more difficult.”
To get around this, Yezzi says, “We ask ourselves, ‘How can we reach as many people as possible and in how many different ways as possible?’ We try to have those multiple formats available to get in touch with people throughout the year.”
The company also holds a second 401(k) session as part of its annual open-enrollment offering—another opportunity to discuss personal retirement goals with a professional.
Wendy Pokorsky, Transamerica relationship manager, says JX Enterprises also allows participants to manage their own retirement through online tools, and, in fact, last year there were 6,786 log-ins to the participant website.
One tool helps employees track their retirement accounts while also pulling data from outside savings accounts and other investments into the system to give a clearer picture of the participant’s progress. The system uses weather symbols to indicate retirement outlooks, with suns representing good ones and clouds, room for improvement.
 “The engagement is what I’m most excited about because a lot of people are logging in and asking questions and looking for ways to do better,” says Yezzi. “It’s been great to see that shift in mentality to excitement and enthusiasm behind the plan.”
Pokorsky adds, “We also send out annual statements showing on-track statuses in print. If participants are aware of their account status, they’re more likely to take action. We have seen a change. Now, more than 80% are showing a positive retirement outlook through that tool.”
Escalating Goals
Automatic enrollment and escalation features have also improved metrics in JX Enterprises’ 401(k) plan. In 2014, the company introduced an auto-escalation program and, in January 2016, increased the auto-enrollment deferral rate from 3% to 6%. Also at that time, it initiated a re-enrollment program in which anyone contributing less than 6% or not contributing at all was automatically re-enrolled at that level. Further, the company increased its share of the match from 3.0% to 3.5% and the cap on its auto-escalation program from 6% to 10%.
To not leave its higher-compensated workers behind, the firm sought a safe harbor. “By moving to a safe harbor program, we were able to eliminate the need for ADP [actual deferral percentage] testing that impacted our high-performing salespeople, who for years were prevented from maximizing their 401(k) contributions. With these changes, only one new hire opted out of our 401(k) plan in 2016—every other one has enrolled in the program,” Yezzi says.
Looking ahead, JX Enterprises especially intends to stay true to one of the major initiatives it credits with driving its success thus far: education.
“UBS provides input, options and training, and so does Transamerica,” says Yezzi. “We work hand in hand with them to drive education initiatives. We talk about where we need to focus. This year, we’re asking, ‘How do we get more people to that super-saver status?’ We want to get at least 20% in that status. Our education program is going to focus on that. We bumped it recently to 13.9%. We’re climbing. We’re getting there.”
JX also intends to focus on educating its employees on the potential downside of taking loans from their retirement account.
“Moving forward, we’re going continue to find different ways to help people avoid 401(k) loans,” says Yezzi. “That’s going to be a big talking point when we have face-to-face sessions. We’re going to try to convince people [borrowing against their account] isn’t the best choice. We may put stricter limits on loans that we allow. We certainly don’t want to restrict [them] completely, but I think the more we can help people avoid those decisions, the better off we are.”
The company will also focus on educating participants about a Roth 401(k) option and driving engagement. “We do hire a number of young people, and the Roth can offer huge benefits for a younger person,” Yezzi says.  —Javier Simon

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