Gracie Inacay
Head of Human Resources
  • Total Plan Assets
    $131 million
  • Participants
  • Participation Rate
  • Average Deferral Rate
  • Default Deferral Rate
  • Default Investment
    Vanguard Target Date INV Share Series
  • Automatic Enrollment
  • Automatic Escalation
  • Employer Contribution
    3% safe-harbor match on all contributions + 12% profit-sharing contribution

Harris Associates, a financial services company headquartered in Chicago, offers a safe harbor plan for its employees and a profit-sharing contribution—3% match on each payroll and 12% on eligible earnings respectively—and implemented automatic enrollment and automatic escalation in January 2018 to raise participation rates and deferrals.

Participants were auto-enrolled in the plan at a 6% default deferral rate, which increases yearly by 1% up to 10%, and has a three-year vesting schedule. Participants who were already deferring less than the default rate were re-enrolled to 6%. Additionally, Harris added informational sessions geared to workers at two different life stages—pre-retirees and those with substantial time left to work—and provided no-cost, one-on-one sessions during company time. Since then, participation rates have increased from 81.4% to 93%, with a rising average deferral rate from 9.9% to 11.3% and an average account balance of $457,300.

“The majority of employees felt this forced them to save more towards retirement, and so we saw existing participants go to the default percent. Some of them actually elected the auto-escalation as well,” says Gracie Inacay, head of human resources at Harris.

Harris covers most of the plan administration costs, including the self-directed brokerage account (SBDA), recordkeeping, website access, and compliance services fees. Actively employed participants pay only the fees for mutual funds in the SDBA, while once-employed participants pay a minimal account fee quarterly.

In 2016, Harris migrated to a new recordkeeper after realizing the one it had been using lacked participant-friendly platforms, and found that Principal’s web platforms closely aligned with its goals. As part of the upgrade, collective investment trusts (CITs) and target-date funds (TDFs) were added to the investment lineup.

“For us, it’s all about what more can we be doing to educate and increase engagement, and developing different strategies to get to that,” says Inacay.

During the transition between recordkeepers, the company partnered with Principal’s implementation and transition team to allow participants to explore the new website and use their customer service hotline for any questions. The company also offered educational meetings explaining the transition and plan changes, both in-person and through a webinar. Now, through its recordkeeper, Harris provides one-on-one visits with a retirement specialist, educational sessions, and online educational opportunities.

This year, the company plans to incorporate in-plan Roth conversions. Participants may currently make both pre- and after-tax deferrals. However, as an after-tax option becomes more in demand, Harris’s administrative committee, which includes the relationship manager at Principal, is talking about adding the feature and how to educate participants about it.

“It’s important to have educated participants,” Inacay says. “We want to ensure that our employees and their families are taken care of for the future.”

Amanda Umpierrez



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