2021
Corporate 401(k) >$300MM–$1B

Old National Bancorp

FINALIST
George Lance
Senior Vice President and Rewards and Training Director
  • Plan(s)
    401(k)
  • Total Plan Assets
    $352MM
  • Number of Participants
    3,050
  • Participation Rate
    98%
  • Average Deferral Rate
    7.4%
  • Default Deferral Rate
    6%
  • Default Investment
    Principal LifeTime Hybrid Collective Investment Trust Funds
  • Automatic Enrollment
  • Automatic Escalation
  • Employer Contribution
    75% of 4% + 50% of the next 4%
  • Provider(s): Recordkeeper
    Principal Financial Group; Adviser: Sheridan Road Advisors LLC
  • Financial Wellness Educators(s)
    Principal Financial Group, Sheridan Road Advisors LLC, National Financial Educators Council

For Old National Bancorp, implementing a stretch match that requires 401(k) plan participants to save 8% to receive the full employer match has helped boost average deferrals to 7.4%. In making the formula change, the company increased its own matching contribution.

Old National has grown exponentially over the past decade, says George Lance, the bank’s senior vice president and rewards and training director. It now operates primarily in five states: Indiana—with its main office in Evansville—Kentucky, Michigan, Minnesota and Wisconsin. “We’re a regional bank, and we’ve now expanded into some of the larger markets in the Midwest [such as Minneapolis and Milwaukee],” he says.

In early 2018, Old National decided to revisit its 401(k) match approach. “We thought we needed to stay on the leading edge, because we are growing and going into the larger markets,” he says. “We want our plan to be comparable to the larger employers in all of our markets and also potentially in the lead position in some markets.”

Since 2010, Old National had offered an employer match of 50% of the first 6% of pay, so participants potentially got a 3% match. “We thought, ‘Let’s do the match formula in a way that’s a more meaningful benefit for our people,’ and we decided on a 5% employer contribution, which puts us in a good position versus our peers,” Lance explains.

Then Old National analyzed a handful of different match-formula options that would equal a 5% employer contribution. “We had seen the tendency of people to contribute enough to maximize the match, and at that point our average deferral was at about 5.5%,” he says. “We thought, ‘If we move it so they have to contribute more to get the full match, we can really drive additional saving behavior.’”

So, in mid-2018, the plan moved to a match of 75% of the first 4%, plus 50% of the next 4%—a total potential employer match of 5% given to participants who contribute at least 8%. To help explain the new match formula to its employees, Old National used multiple communication approaches, Benefits Leader Mary Scheller says. “We sent them emails, and we also created ‘flash screens’ that would display a message when they first started up their computer,” she says. The communications campaign utilized the slogan “Eight Is Great,” she says, and explained that participants who defer 8% will get the full 5% employer match, for a 13% total contribution.

For the employer—which also does an annual re-enrollment sweep of nonparticipants and under-savers, at 6%—the formula change meant a potential increase in expenses, from matching 3% of pay to 5% of pay. “From our perspective, it was worth it because it has helped motivate, engage and retain our team members,” Lance says. “It helps our people be better prepared for retirement. And having team members who feel more secure about their own financial future better positions them to work with our clients on helping them to be financially successful.”

Judy Ward

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