DEFAULT INVESTMENT:  Schwab Managed Retirement Trust Funds

Throughout the 55-year history of Humana, a firm that sells medical, and related, insurance and promotes workplace health and well-being, its mission has been to help people be their best. Timothy State, senior vice president, associate health and well-being, says, “Our dream is to help people achieve lifelong well-being: It expresses our long-term vision and purpose as an organization.”

Humana’s belief in this dream has energized the plan sponsor to focus on understanding its associates’ wellness needs and delivering integrated solutions across four dimensions: purpose, security, health and belonging. The company, located in Louisville, Kentucky, believes that financial wellness is an important part of one’s total personal wellness; therefore, it integrates financial security into its own corporate well-being program.

Last summer, it invited its associates to share their perspectives through an associate preferences survey. Responses from more than half showed that “the highest value was placed on the 401(k) benefit, emphasizing our continuing need to cultivate that opportunity,” says Erik Anderson, director, associate well-being benefits. “By combining those preferences, and the input of senior leadership and subject matter experts, we were able to evolve our benefit offerings in a way that best supports the associates and our mission.”

Part of that support was an effort to reduce financial stress. Karen Shore, consultant, associate well-being benefits notes, “Finances are a leading source of stress among Humana associates, so it’s important for the company to engage them in financial guidance activities, to help improve their overall well-being.” By completing those activities, they earn additional company funding in their health care spending accounts. For instance, through the WOW! Working on Well-Being® program, they receive WOW Bucks when they complete a telephone retirement plan advice consultation or attend a financial education webinar.

The most popular financial guidance activity is to model on recordkeepers’ Schwab’s interactive MyRetirement Progress tool. “This is a real eye-opener for most participants,” Shore says. By changing various elements, such as saving pre-tax vs. Roth, one’s saving percentage or year of retirement, or by including savings outside of the plan, participants can see how small changes, made today, can impact their financial security later, she says.

“Together,” Shore says, “these incentives helped drive almost 13,000 associates to engage with the plan’s MyRetirement Progress interactive retirement modeling tool in the first six months of the program, and more than 20,000 to engage with financial education webcasts in 2017.”

Additionally, Humana has implemented automatic enrollment, and automatic escalation up to 10%. On being automatically enrolled, about half of those associates stay at the auto-enroll rate of 4%, while 40% make an affirmative election above it. The company match contribution of 125% up to 6% helps drive this positive behavior.

“Sixty-six percent of Humana’s associates receive the full company match,” Shore says. “Combining deferrals and the match, these associates save, on average, over 15% of compensation each year toward their retirement.”

Further, she notes, “Fee transparency has been important to Humana for many years.” Prior to the 2012 fee disclosure rules, its retirement committee adopted a philosophy to select investments with zero revenue sharing, where available. Today, Schwab’s recordkeeping system enables the plan to level fees, so revenue sharing is credited only to those participants who were charged fees based on their investment selections, she says. —Judy Faust Hartnett

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