Midwest Family Mutual Insurance Co.
PARTICIPATION RATE: 92.8%
AVERAGE DEFERRAL RATE: 9.89%
DEFAULT DEFERRAL RATE: 8%
DEFAULT INVESTMENT: Principal LifeTime Hybrid Funds
AUTOMATIC ENROLLMENT: Yes
AUTOMATIC ESCALATION: Yes
EMPLOYER CONTRIBUTION: 50% of 8%
Midwest Family Mutual Insurance Co. (MFM) has a work force spread over 14 states, and most employees work from home rather than at the West Des Moines, Iowa, headquarters.
“As a small to midsize insurance company, we compete with the big players for insurance talent,” says Kristie Van Pelt, senior vice president, chief financial officer (CFO) and treasurer. “Our recruiting talent pool is larger, as our prospective employees can live anywhere with a broadband internet connection. As a result, we also attract more rural-based employees who would not be able to work for another insurer without a substantial commute to a traditional, large-city office location. Working from home provides for better work/life balance, as employees don’t have the commute time taking them away from their families.”
The property/casualty insurer has come up with ways to effectively educate its geographically dispersed work force about its 401(k) plan. As new employees get automatically enrolled, for example, Human Resources (HR) Director Becky Szymczak schedules an individual telephone call with them within two weeks of their benefit-eligibility date. Using an online voice, video and web solution, she can answer any automatic enrollment questions, and show a new employee how to get started on the participant website and update personal information. “We are on the phone and able to share our desktop screens with each other at the same time,” she says, “so we can walk through the website and update the participant’s information together.”
MFM also holds an online annual retirement-education meeting, utilizing the online solution. Joel North, senior financial representative and financial adviser with Principal Financial Group, joins the online meeting to give tips on using the recordkeeper’s tools, and to remind employees he’s available for one-on-one consultations and provide his contact information. Further, during their monthly online employee meetings, staffers get periodic reminders such as a heads-up about the plan’s next automatic escalation kicking in and also hear updates such as the current average deferral percentage of plan participants.
On an ongoing basis, Principal’s online tools play a big role in helping participants think about their retirement readiness. “The interactive tools on the Principal website allow employees to customize their information, to better reflect the impact of changes they might make to better prepare them for retirement,” Szymczak says. “Employees can add information on their external savings and other retirement plans, adjust deferral percentages for both salary and bonuses, and incorporate potential future merit increases, to see how this will impact their retirement savings and overall Retirement Wellness Score.” Principal’s system calculates these scores for each participant.
According to plan-level data from Principal’s Retirement Wellness Score calculations, employees at MFM—which also sponsors an active defined benefit (DB) plan—are in better than average shape for their retirement outlook. Using green, yellow and red stoplight imagery, Principal classifies employees on track to replace 70% or more of their pre-retirement income in the green category.
As of year-end 2017, “MFM has 71% ‘green’ participants, compared with just 16% of participants in all plans Principal provides recordkeeping for,” Van Pelt says. —Judy Ward
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