Public Defined Contribution (DC)

Alaska Division of Retirement and Benefits

Kathy Lea
Chief Pension Officer, Alaska Division of Retirement and Benefits
  • Plan(s)
    457(b); 401(a)—Social Security replacement
  • Total Plan Assets
  • Number of Participants
    107,477 in 457(b)
  • Participation Rate
    38% for voluntary 457(b); all belong to 401(a)
  • Average Deferral Rate
    7.8% for 457(b)
  • Default Deferral Rate
    Not reported
  • Default Investment
    Not reported
  • Automatic Enrollment
  • Automatic Escalation
  • Employer Contribution
    0%–6% for 457(b)
  • Provider(s)
    Empower Retirement
  • Financial Wellness Educator(s)
    Empower Retirement

In-person participant education is difficult in Alaska, where 80% of the state has no road system.

If you superimpose a map of Alaska over one of the U.S. mainland, our 49th state would stretch, north to south, from Florida to Canada, says Chief Pension Officer Kathy Lea of the Alaska Division of Retirement and Benefits in Juneau, Alaska. “I know other states have geographical challenges, but maybe not as many as we do.”

The reality that offices may lie at great distances from each other poses some major challenges for educating participants in Alaska’s retirement system, says Roberto Aceveda, Juneau-based counseling and benefit education manager. “Our phones don’t work that great, internet service doesn’t work that great unless you’re in a major city, and a mailing may take two to three weeks to arrive,” he says.

Not surprisingly for such a big state, the cultures of different areas also vary widely. “We had a major communications breakdown, especially when it comes to the far north and the outlying villages and small towns,” he says. “We knew we weren’t ‘getting to’ everybody—not even close.”

In 2018, Division of Retirement and Benefits staff members attending their annual strategic-planning session with recordkeeper Empower Retirement decided to step up the education efforts. That led to an almost 30% year-over-year increase in 457(b) plan enrollments in 2018 and a 35% jump last year. The lifetime income score utilized by Empower to project these participants’ retirement-income replacement levels also increased by 10 percentage points, from 59% retirement-income replacement in 2017 to 69% in 2019.

The revamped education campaign included the 2018 introduction of a mascot illustration, Bjorn the brown bear, to make the message relatable to employees in all parts of Alaska. “Every area of the state has bears, and every group understands how bears prepare for the winter,” Lea says. “Bjorn has become our vehicle for talking about saving: It’s that whole idea of, ‘Prepare for your future.’ They can all understand, ‘I’ve got to save for my future, because winter is coming.’”

Collaborating closely with Empower, the division also started improving communication connectivity with participants around the state. It offers one-on-one counseling with system staff by phone or the WebEx videoconferencing app and is exploring buying cameras for state-office locations lacking the equipment to host online meetings for participants. Empower staff also travel in the state doing on-site education meetings.

To explain the state’s retirement plans to new employees, Aceveda and his team have recently introduced a series of videos, which they wrote, storyboarded and filmed. Their original videos ran well over an hour. “We learned that you can’t stream something that’s an hour and 45 minutes to someone in one of the villages [due to online-connectivity issues], but you can get them to download something that’s five to 15 minutes,” Aceveda says. “So now we break that down into bite-size information, like individual chapters of a story.” In conjunction with watching the videos, new employees are encouraged to schedule a meeting by phone or WebEx with a counselor on Aceveda’s team.

In this year’s second quarter, the division also plans to roll out a targeted campaign focused on generational marketing. Continuing the use of Bjorn the bear, the three initial flyers feature illustrations of a young Bjorn, a middle-aged Bjorn and an older Bjorn. “The message for younger employees is about how little they have to put in now to make a significant difference in the amount they’ll have at retirement,” Lea says. “For middle-age employees, the message is that they do have to put a little more in than younger employees do, but they still have enough time. For older employees, the message is, ‘You can still do this; here’s how.’”

Judy Ward

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