Mary Ann Edwards
Manager, Total Rewards
  • Plan(s)
  • Total Plan Assets
  • Number of Participants
  • Participation Rate
  • Average Deferral Rate
  • Default Deferral Rate
  • Default Investment
    Prudential Retirement GoalMaker with IncomeFlex
  • Automatic Enrollment
  • Automatic Escalation
  • Employer Contribution
    100% of 4% + 50% of the next 2%
  • Provider(s)
    Recordkeeper, Prudential Retirement; Adviser, CBIZ Retirement Plan Services
  • Financial Wellness Educator(s)
    Prudential (LINK program)

The average participant account grew about $20,000—from $46,000 to $66,700—between 2016 and last December due to the sponsor’s investment changes.

JTEKT North America, an engineering and manufacturing solutions company located in Greenville, South Carolina, wants employees to be in the know about important financial and retirement planning topics. Although the plan uses design features that combat participant inertia, such as automatic enrollment and automatic escalation, the sponsor also wants to make sure its employees themselves are actively engaged in retirement planning.

A participant engagement strategy “ensures we meet associates where they are,” says Mary Ann Edwards, manager, total rewards. Last year, the company was part of a personalized financial wellness coaching pilot with Prudential Retirement—the plan’s recordkeeper for the past 30 years—in which employees and their spouses could schedule virtual meetings with a retirement counselor to discuss budgeting, retirement savings and emergency savings.

“For JTEKT, education has been a staple of our approach,” says Anton Tansil, managing director, key accounts at Prudential Retirement.

JTEKT also uses LINK by Prudential, a digital program that helps connect employees with solutions and professionals who can help them achieve financial goals. Additionally, JTEKT employees can access the Prudential Retirement app, which 500 of them have used in the past year, Edwards says. This multichannel approach, which includes targeted hard copy and digital mailers as well, ensures everyone gets involved in their retirement planning. The company’s digital open rate exceeds industry standards, Edwards says, and about 25% of the employees attend in-person meetings and events.

One such in-person opportunity is with Mike Riley, a Prudential insurance agent who has provided on-site education sessions for years at JTEKT. Edwards describes Riley’s visits as “well-publicized,” adding that “he’s never met a stranger. He’s very well-known [at the company].”

To take the confusion out of investing, JTEKT adopted Prudential’s GoalMaker asset-allocation program, which automatically adjusts to a more conservative portfolio as the employee nears retirement. Nearly 82% of JTEKT’s employees use the program, which has led to 92% of participants investing in four or more funds in the plan. In October, JTEKT added Prudential’s IncomeFlex, a guaranteed withdrawal benefit solution, as a stand-alone and GoalMaker fund; this placed 50% of JTEKT participants on the path to a lifetime retirement income stream they cannot outlive.

JTEKT has many employees approaching retirement—the average age is 44—“so this IncomeFlex is very interesting to them to give them a ‘landing pad,’” Edwards says.

A targeted Prudential campaign for JTEKT, she adds, resulted in more than $10 million in plan assets held in IncomeFlex in less than a month.

All of the efforts are paying off, with the average participant account balance growing from $46,000 in 2016 to $66,700 at the end of last year, Tansil says. Employees are very diligent about saving, he adds, and “that’s a testament to the committee and the thoughtfulness with which they implemented these design changes.”

JTEKT’s 401(k) plan has automatic enrollment beginning at 4%, automatic escalation and re-enrollment. Annual auto-escalation from 4% to 6% occurs in 1% increments, and JTEKT matches this at 50% with full vesting. Less than 2% of participants—100—opt out of re-enrollment, and 58% have chosen to auto-escalate.

In the future, JTEKT is looking into adding a participant debt management program, which would include student loan debt relief. The sponsor is also looking at increasing the contribution escalation maximum from 6% to between 8% and 10%.

“What I’ve found in my time here is how engaged our retirement planning committee is and has been,” Edwards says. “This is a strategy that’s been many years in the making. And it’s always been with the [recognition] that there’s life after work and there’s life after JTEKT. … So we’ve tried to meet people where they’re at, and get them going as soon as they can, and keep them engaged and help them land well.”

Corie Hengst

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