Corporate 401(k) >$1B

Hawaiian Airlines, Inc.

David Acklin
Senior Adviser, Strategic Benefits, Human Resources
  • Plan(s)
    Three 401(k)s: Pilots’ Plan; Savings Plan for the corporate workforce, including part-time employees and mechanics; Flight Attendants’ Plan
  • Total Plan Assets
  • Number of Participants
  • Participation Rate
    74%—average for three 401(k) plans; Pilots’ Plan, 79%; Savings Plan, 70%; Flight Attendants’ Plan, 88%
  • Average Deferral Rate
    11% average of three plans; Pilots’ Plan, 14%; Savings Plan, 10%; Flight Attendants’ Plan, 11%
  • Default Deferral Rate
    6% for Pilots’ Plan
  • Default Investment
    Vanguard TDFs for the three 401(k)s
  • Automatic Enrollment
  • Automatic Escalation
  • Employer Contribution
    Pilots’ Plan – fixed 15% of compensation; Savings Plan – a number of unions in this plan, which have different negotiations, though everyone gets at least 4%–5% of compensation + 2% in additional match; Flight Attendants’ Plan – For most is based on service, starting at 5% of base compensation + 2% in additional match
  • Provider(s)
    Recordkeeper: Empower Retirement; Adviser: Russell Investments
  • Financial Wellness Educator(s)
    Empower Retirement

“It’s what they do when times are not good that shows the true culture at a company,” says Percy Monroe, relationship manager at Empower Retirement, the recordkeeper for Hawaiian Airlines’ three 401(k) plans.

Hawaiian Airlines, despite the financial effects of the pandemic on the airline industry, continued its generous employer contributions, Monroe says. “There was never even a discussion about stopping contributions.”

But there were discussions about adding timely education, on topics that would help participants stay the course to reach their retirement goals. Hawaiian Airlines, with headquarters in Honolulu, has in-house plan relationship managers (PRMs)—a group of human resources (HR) generalists to whom employees may turn with questions about their 401(k) or other benefits before contacting Empower, Monroe says.

During the pandemic, education efforts ramped up. The airline distributed fliers, issued quarterly newsletters and provided ongoing education on the company’s Intranet. It offered three full days of webinars, last April, for participants to choose from and a follow-up in May about market volatility. The plan sponsor also arranged for five days of one-on-one sessions with representatives from Empower Retirement.

Teri Okuda was the senior manager of benefits at Hawaiian Airlines until she retired this March. David Acklin, senior adviser, strategic benefits, human resources, is now in this role. Anticipating passage of the Coronavirus Aid, Relief and Economic Security (CARES) Act last year, the team at Hawaiian Airlines studied the act’s provisions so they would be prepared to offer coronavirus-related distributions (CRDs) and expanded loan limits, Okuda says. “In Hawaii, the cost of living is so high that some people work two or three jobs. That’s where my heart was—with people losing jobs—though I didn’t really want them to touch their retirement plan savings,” she says. Within three days of the bill passing, Hawaiian Airlines informed employees of what was now available, but also what to consider before taking money from the plan.

Not wanting to terminate any workers, the airline offered early retirement packages. It hosted four days of retirement workshops to help participants decide whether they could or wanted to retire. The workshops included education about the 401(k) plans, Social Security and Medicare, and also a CARES Act piece.

“The type of planning most people would do over five years had to be fast-tracked to six months, so we wanted to help them make the most thoughtful decisions,” Okuda says. “Even though the HR staff was also reduced during the pandemic, we were available day and night. We created a hotline to help employees with these new tough decisions.”

The pandemic pushed the airline to implement 401(k) plan initiatives and features it had already been considering, Okuda notes. It amended its loan policy so plan participants could make loan repayments even if they were no longer employed. It also added installment and partial withdrawal options to the plan.

“The important thing about that is Hawaiian Airlines pays the fees for the 401(k) plans,” Monroe says. “Previously, participants could only either keep assets in the plan or take a lump sum. With the addition of installment and partial withdrawals, more employees could keep their money in the plan and the company paid the fees.”

To adopt these plan provisions, the team had to call an emergency retirement committee meeting. “The executives were so busy trying to keep the company afloat, but I told them, ‘This is important. It cannot wait until the quarterly meeting,’” Okuda says. “They were very receptive and approved plan amendments. We also worked with the unions. Items that usually had to go through collective bargaining were fast-tracked. It was a team effort to help employees.”

Throughout all of this, Monroe says, the committee focused on whether participants’ accounts were properly diversified. “In Hawaii, there is generally a culture of being conservative with money,” he says. “So, getting information to help make informed decisions is critical.”

The airline decided to offer Empower’s My Total Retirement program, which provides investment advice, he says. However, through the financial wellness program already offered via Empower, employees could schedule calls with the provider’s representatives to talk about their personal finances, as well.

Too few people voluntarily left the company, so it did have to terminate some. Employees understood that was a necessary step for Hawaiian Airlines to survive, and they took each other into account, Okuda says. “Some employees who wanted to wait to retire, volunteered to retire so their younger co-workers could have job security,” she says.

Employees were appreciative of what the company did during the pandemic. “Older employees helped younger employees. There was a sense of pride for all of us in being able to assist. That will always stay with me,” she says.

Rebecca Moore

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