Denise Zapf
Benefits Director
  • Plan(s)
    401(k)
  • Total Plan Assets
    $827MM
  • Number of Participants
    3,067
  • Participation Rate
    91.6%
  • Average Deferral Rate
    8.6%
  • Default Deferral Rate
    4%
  • Default Investment
    T. Rowe Price Retirement Trust
  • Automatic Enrollment
  • Automatic Escalation
  • Employer Contribution
    25% of first $4,000 + possible profit sharing
  • Provider(s)
    Recordkeeper, T. Rowe Price; Adviser, Ellwood Associates
  • Financial Wellness Educator(s)
    SmartDollar, T. Rowe Price, Ellwood Associates


To date, 460 out of 2,000 employees have signed up for SmartDollar; the 23% who have participated have saved, in total, an additional $584,000 and paid off $562,000 since 2018.

McGuireWoods LLP, a law firm in Richmond, Virginia, was an early adopter of automatic solutions for its 401(k) plan, implementing such features four years before the passage of the Pension Protection Act of 2006 (PPA). The plan adopted automatic enrollment in 2002, in which newly eligible employees are enrolled in the plan at a default deferral rate of 4%, and assets are invested in an age-appropriate target-date fund (TDF). The plan also uses automatic escalation to increase employees’ deferral rates 1% every year up to 15%. In addition, employees who opt out of the plan are automatically re-enrolled every year, and for those not saving 4%, there’s an “auto-boost” feature that automatically raises the employee deferral rate to 4% for those saving between 0% and 3%.

The automatic re-enrollment feature, in particular, shows that the sponsor understands that circumstances may change for employees from year to year, says Francisco Negrón, head of client services at recordkeeper T. Rowe Price, which has worked with the law firm for the past 20 years.

In fact, about half of the people not participating end up doing so through the re-enrollment process.

“I think that’s an interesting statistic,” Negrón says. “To me, what’s telling about that is, somebody, for whatever reason, had decided they couldn’t participate in the plan, but that doesn’t mean it was a permanent decision.”

McGuireWoods’ 401(k) plan has a 91.6% participation rate, and 48% of those participants use auto-escalation. About 60% of employees have allowed themselves to be automatically bumped up to a 4% deferral.

“It’s been very good for our participants. We’ve had people come back and thank us for doing it,” says Denise Zapf, benefits director, of the auto-feature.

In addition, the investment committee always has an eye on fees, as its members know how they can affect a participant’s ability to save. When the law firm hired Ellwood Associates as its adviser last year, it renegotiated pricing and switched to fee leveling to increase fee transparency for participants. The sponsor also simplified the investment menu by reducing the number of options and adding lower-cost trusts, including a small-/mid-cap collective trust. The investment lineup includes the T. Rowe Price Target Date investments, a money market option, two bond funds, and both indexed and actively managed equity funds.

McGuireWoods provides a match of 25% of the first $4,000 deferred by the participant and profit sharing of 7.5% of compensation. The plan also allows participants to defer pre-tax 401(k) and catch-up, Roth 401(k) and catch-up, and after-tax dollars, plus it offers an in-plan Roth conversion option.

To help employees save even more for the future, the firm also uses an online financial wellness program through Dave Ramsey’s SmartDollar, which the firm started employing in 2008.

“People really love it,” Zapf says. “The videos are entertaining and informative.”

To date, 460 out of 2,000 employees have signed up for SmartDollar. And the 23% who have participated have saved an added $584,000 and paid off $562,000 since 2018, she says.

Although Zapf says hardships with student loans aren’t a big issue among the firm’s employee base, because of the higher incomes that come with their jobs, “you hear a lot from the outside,” she says. “[Student debt is] something that’s big in the news right now.” However, McGuireWoods does offer employees the opportunity to refinance their student loans at a lower interest rate, and, if they pay their loan on time, they get a bonus added to pay off their principal. This is also available for spouses and parents, Zapf says.

As the sponsor looks ahead to the next year, the goal remains steady: to help employees be better off tomorrow than they are today through the benefits they receive from the firm.

Corie Hengst

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