Total Plan Assets: $25 million
Number of Participants: 573
Participation Rate: 92%
Average Deferral Rate: 8.14%
Default Deferral Rate: 6%
Default Investment: Vanguard Target Retirement Fund
Automatic Enrollment: Yes
Automatic Escalation: Yes
Employer Contribution: 50% on 6% for those with less than 7 years of service; 60% on 6% for those with 7 years – 14 years; and 70% on 6% for those with 15 or more years 

Riddle’s Group is the parent company of a chain of retail jewelry stores primarily located in the Midwest, and headquartered in Rapid City, South Dakota. Besides being a jewelry retailer, the company is one of the few jewelry manufacturers remaining in the U.S., distributing products through its stores as well as, wholesale, to customers ranging from large-volume discounters to independent mom-and-pop jewelry stores.

David Westergaard, executive vice president and chief financial officer (CFO), says operating in this line of business means the company has a diverse workforce with unique needs. A significant percentage of the employees work in a retail setting, Westergaard says, but others spend their time in metal workshops or representing the company out in the field. Riddle’s “team members,” as employees are called, are divided among blue-collar and white-collar staff, as well as younger and older workers.

As noted by Joe Connell, a partner with Sikichs retirement plan services practice and Riddle’s plan adviser, more than 20% of participants in the Riddle retirement plan save at 10% or better, and the retirement plan’s participation rate of eligible employees is 92%. The firm has embraced an aggressive automatic enrollment of 6%, with automatic annual deferral escalations moving up to a 15% cap.

“This stands out in a retail environment where industry participation averages are closer to 52%,” Connell says. “Retail can be a tough sector of the market, especially jewelry retail. It’s a very competitive industry, and to see Riddle’s commitment to its team members is impressive.”

Westgaard says the company is currently in its 60th year of operation and tarted from a single shop. He says Riddle has historically been progressive and paternalistic about offering quality retirement benefitsthe leadership has always understood how important this is to building a stable and successful company that can grow and last beyond one generation.

“We look at the 401(k) as an essential piece of our overall benefit plan in attracting new, quality employees and making sure we have a healthy workforce,” he says. “Our plan allows us to address the retention challenge in the retail industry in a powerful way.” 

Ann Wolfe, Wells Fargo’s relationship manager for the plan, agrees that Riddle’s Group stands out in the retail industry. She has been assigned to the company for four years and has seen the committee push the plan performance forward in a variety of ways, especially through progressive plan design and targeted participant education.

In 2012, when many plans were just starting to think about engaging an Employee Retirement Income Security Act (ERISA) Section 3(21) nondiscretionary fiduciary adviser, the firm engaged Connell as a Section 3(38) fiduciary investment manager. The company tasked Connell’s team with not only providing discretionary investment services to the plan, but also conducting individual and group education sessions for team members. More recently, the plan committee embraced another emerging trend by converting the investment menu to a 100% zero revenue-sharing fund lineup, featuring the lowest-cost share classes available in every investment option.

“We place a high emphasis on helping team members understand what they need to save for retirement and encourage them to contact our plan adviser at any time with their personal questions,” Westergaard says. “We pay 100% of fiduciary adviser fees out of corporate assets. The administration fees of our plan are set at $63 per participant annually. The fees have been negotiated lower several times in the past five years as we strive to offer the most competitive pricing program we can for our employees.” —John Manganaro

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