DEFAULT INVESTMENT:  Principal LifeTime Hybrid Collective Investment Funds
EMPLOYER CONTRIBUTION: 100% match of the first 3% of contributions; 50% match of the next 3%

The Golder Associates Inc. retirement plan embodies the philosophy of not settling for “good enough” and instead pursuing true retirement plan excellence. The engineers and scientists at Golder, headquartered in Atlanta, provide consulting, design and construction services in the specialized area of earth and environment.

Over the last five years, Golder has made key plan changes to modernize and streamline the retirement plan while continuing to help employees save for a successful retirement, explains Valeria Thomason, benefits manager.

As part of the evolution, wholesale changes have been made to automatic features, the employer contribution and the investment lineup. As a result, participation has increased from 85% to 96%; the average deferral for participating employees increased from 6.2% to 9.2%; the share of participants using the target-date fund (TDF) investment default increased from 57% to 89%; and the average account balance doubled, from $77,208 to $150,688.

While the numerical improvements have been impressive in their own right, the plan leadership is thoughtful about what the changes have meant for real participant outcomes, Thomason says. Importantly, the firm understands its employees are compensated well for their work, and, as a result, many employees will not benefit from Social Security income replacement on the top end of their wages.

“While deferral rates of 6.2% were above the peer average five years ago, we knew that savings rates at this level would not actually provide sufficient income replacement overall,” Thomason says. “Thus, the plan took concerted action, and it has paid off.”

In partnership with Compass Financial Partners and Principal Financial, the retirement plan committee continues to look for ways to facilitate retirement saving. Some of the additional steps being taken include establishing automatic deferral increases ranging up to a 12% cap, as well as simplifying the investment menu from 28 funds in 2012 to 19 today.

Tied to these changes, the company has modernized and simplified its automatic enrollment and the employer contribution. Previously, the plan automatically provided a 3% nonelective employer contribution plus a 1.5% discretionary profit-sharing contribution on all compensation up to the taxable wage limit, and an additional 6% employer contribution on compensation above the taxable wage limit but less than the compensation limit. Today the plan offers an employer match of 100% of the first 3% of participant contributions, plus 50% of the next 3%.

“Finally, we have prioritized retirement education services and group education meetings and webinars, and made available one-on-one education meetings either in person or by phone,” Thomason notes. “We rely heavily on targeted education communications, and general retirement and savings communications alike.”

Thomason credits Compass Financial for presenting the investment committee with information from Shlomo Benatzi, the respected researcher and behavioral economist, known for the concept of 90/10/90. The model includes targeting at least 90% participation, savings rates of at least 10%, and 90% of participants using a professionally managed asset-allocation investment solution.

“The committee agreed that those goals should be the focus for the retirement plan and that targeting those goals would truly help employees save for a successful retirement,” she concludes. “So far, great progress has been made toward achieving these goals, and we will continue to make this a point of focus.” —John Manganaro

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