Lisa Joe
Director of Retirement Programs and Services
Jason Culp
Retirement Plan Manager
  • Plan(s)
    403(b); 457(b); 401(a)
  • Total Plan Assets
    $6.2B
  • Number of Participants
    38,884
  • Participation Rate
    100% for 401(a); 13% for 403(b); 4.95% for 457(b)
  • Average Deferral Rate
    6% for 401(a); 10.6% for 403(b); 9.0% for 457(b)
  • Default Deferral Rate
    Not applicable
  • Default Investment
    Vanguard Target Retirement Funds
  • Automatic Enrollment
    No
  • Automatic Escalation
    No
  • Employer Contribution
    9.24% of pay to 401(a)
  • Provider(s)
    Recordkeepers, TIAA, Fidelity Investments, AIG; Adviser: CAPTRUST
  • Financial Wellness Educator(s)
    TIAA, Fidelity and AIG for all plans


When we did the fee assessment, the flat-fee structure was the best option for the majority of participants.

Now that the University System of Georgia (USG) has finished a major modernization of its retirement benefits, it’s moved on to its next big challenge: convincing employees to voluntarily contribute to a defined contribution (DC) plan—even if they start at a modest deferral. “That is our focus for this year,” says Lisa Joe, director of retirement programs and services for USG, in Atlanta. “Our message is, ‘Contribute something.’”

USG’s recent retirement plans modernization project made some big changes. Last year, the 78 voluntary plans merged into one systemwide 403(b) plan and one 457(b) plan. USG consolidated the number of plan providers from 13 to three, simplified and tiered the investment menu, and reduced participant fees by $7 million while also increasing transparency.

The change process

When Joe joined USG, in 2014, she inherited a complex setup. “I came from the private sector, and I was used to having one recordkeeper and a very streamlined investment menu,” she says. Along with the many plans and recordkeepers were hundreds of investment options.

“It was very challenging for us at the system office and for our [human resources (HR)] practitioners on campuses,” Joe says. “The plans had different features, so participants often didn’t know what they could and couldn’t do. It made it frustrating for employees, and for our [HR] practitioners, because there was no easy way for them to access the information they needed.”

The plethora of plans, recordkeepers and investments had evolved over many years. Each campus had one or more of its own plans, and plan sponsors on each campus got to select recordkeepers and make additions to the investment menu as they saw fit. “Historically, our population has always felt it needed to have a multitude of choices,” Joe says.

But the wide array of options actually may have dissuaded some employees from participating, Joe says. “Oftentimes, when employees have a magnitude of choices, the reality is they make no choice at all.” So she and her colleagues spent several years getting buy-in for sweeping changes from a large group of stakeholders, ranging from the president and HR department on each campus to the state legislature. “Our whole [promotion] was about creating a better employee experience,” she says.

After the plan consolidation, last May, the new online-enrollment process went live, in July. “When we got close to the actual consolidation, we did our ‘implementation roadshow,’ where we went to 42 USG locations and did seminars,” Joe says. “We talked about what changes were happening, when they were occurring, and the impact the changes would have on the [participants].” The roadshow took three months.

The $7 million in participant fee savings comes both from consolidating recordkeepers and investment changes, says USG Retirement Plan Manager Jason Culp. “We looked at all of the funds in terms of their share class and looked for where we could transfer into a lower-fee class,” he says of the investment shifts.

USG once offered about 600 investment options, among all of the voluntary plans. That has been narrowed down to four tiers: an active-management and a passive-management tier, each of which has about two-dozen options; a target-date-fund (TDF) tier; and a self-directed brokerage tier. “Target-date funds have the highest percentage of assets—about 70%—because most employees want to ‘set it and forget it,’” Culp observes.

The system also implemented an asset-based, explicit participant administrative fee and eliminated all use of revenue sharing. USG did an analysis of how a flat fee vs. an asset-based fee would affect participants and focused especially on the more than 50% who have a balance between $25,000 and $75,000. “We wanted to make this as equitable as we could,” Culp says. “And when we did the fee assessment, the flat-fee structure was the best option for the majority of participants.”

A focus on contributions

The recent effort to encourage higher voluntary contributions began during the communications campaign for the modernization project in 2018 through 2019. When employees start work in the USG system, they have to choose between mandatory participation in a defined benefit (DB) plan or a 401(a) defined contribution (DC) plan. Choices are about evenly split, Joe says. Employees also may save voluntarily in the 403(b) and 457(b) defined contribution plans.

Both the defined benefit plan and 401(a) plan have a required employee contribution of 6% of pay, which Joe says discourages employees from saving more voluntarily in the 403(b) or 457 plan. “A large majority do not feel the need to contribute to the voluntary plans, because they already contribute to one of the mandatory plans,” she says. She’d ideally like to see USG employees save 18% to 20% of their pay annually, between their own and the employer’s contributions. 

During the communications campaign, the education went beyond explaining the modernization project to encouraging more voluntary saving. “We wanted to make sure they understood the importance of saving more voluntarily,” says Carolyn Dower, a Tampa, Florida-based senior relationship manager at USG’s lead recordkeeper, TIAA. The recordkeeper collaborated with USG in a multichannel communications campaign, and TIAA rolled out a new online participant portal that, among other things, simplifies enrolling in the voluntary plans.

The communications explained how, due to compounding, starting to save early in one’s career can make a big difference in long-term savings. “We gave them personalized projections of the impact on their retirement income if they saved more voluntarily, so they could understand the importance of their voluntary savings rate to their overall outcome when they retire,” Dower says. The two voluntary plans had an average 3% participation rate before the campaign started, she says, and 16% average participation when it ended.

Now, Dower says, USG and TIAA are collaborating on plans for a targeted communications campaign—timing still to be determined—to encourage more participation in the 403(b) and 457 plans. As lead recordkeeper for USG, she says, TIAA can provide the university with holistic reporting that integrates data from all three recordkeepers’ systems and that offers in-depth analytics on participant behavior.

“We’re giving USG very detailed reporting on data such as each USG institution’s participation and average deferral rates in the voluntary plans and what areas need attention for each institution’s employees,” Dower says. “We’re working on coming up with a holistic education campaign, based on the areas at each institution that really have a need.”

Judy Ward

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