PARTICIPATION RATE: 98%
AVERAGE DEFERRAL RATE: 7%
DEFAULT DEFERRAL RATE: 3%
DEFAULT INVESTMENT: T. Rowe Price Target-Date Funds
AUTOMATIC ENROLLMENT: Yes
AUTOMATIC ESCALATION: Yes
EMPLOYER CONTRIBUTION: 100% on 1%, plus 50% of 5%; employer contribution based on years/hours of service.
Plan sponsor staff that work with retirement plan participants frequently are asked, “Can I retire now?” Jennifer Hatcher, retirement plan manager at TriHealth in Cincinnati, Ohio, has heard that question often. TriHealth, Inc. was formed in 1995 as a community partnership between Bethesda Hospital, Inc., and Good Samaritan Hospital in Cincinnati, Ohio. The TriHealth integrated health system has five hospitals, including two tertiary hospitals, plus more than 130 sites of care.
In 2011, the benefits team realized the company had roughly 900 employees with 30 years or more of service, and saw participants lacking in their retirement readiness. The benefits team decided to evaluate its retirement programs and developed a plan to transition from offering a defined benefit (DB) plan with a supplementary 403(b) plan to a defined contribution (DC)-based program with a 401(k) plan, using automatic enrollment.
“When we decided to focus on a 401(k) plan, we only had about 20% participation in the 403(b). Although we offered an active pension in the past, we realized that our team members needed more options,” says Hatcher. “I am pleased to share that now one of TriHealth’s missions is to ensure participants understand their retirement options. It is important that our team members understand when they are retirement ready, without guessing.”
During this process, it was also important to get the various departments working together on the retirement program. “The 403(b) was originally only a payroll deduction; now we have a partnership between finance, human resources and payroll,” Hatcher says.
According to team member Chip Crowther, TriHealth’s chief investment officer (CIO), it was important that employees “learned to fish”—that is, that they utilized tools and resources to make smart retirement decisions. TriHealth started with education about the basics—how the retirement plan works, the benefits of saving and compound interest, etc.—to help employees understand where they stood in their retirement saving. Then, in 2015, when TriHealth froze its pension plan, it implemented automatic escalation.
In 2016, TriHealth issued a request for proposals (RFP) for a new recordkeeper, specifically looking for a one-stop portal that would provide participants with an easy view of benefits across the retirement program. Empower was selected, and it loaded all plan balances for each participant—for the 401(k), pension/equity hybrid plan, frozen 403(b) plan and 457 plan—to its website. As part of its service model, Empower also estimates Social Security benefits for participants, meaning participants can see their updated balance along with their estimated monthly income in retirement online or on participant statements.
Last year, in partnership with Empower, TriHealth implemented a 401(k) education program for employees age 60 and older. As part of this program, participants receive education about their 401(k) options, can speak with an Empower representative about the plan and meet with representatives from the Social Security Administration (SSA), Medicare and RetireMed.
There is always room for new ideas, however, and “TriHealth is always looking to innovate,” Hatcher says. This year, TriHealth is implementing managed accounts in order to support the segment of the employee population that needs them.
—Rebecca Moore