Broadhead Enterprises Inc.

At the time of its application for the 2022 PLANSPONSOR Plan Sponsor of the Year Awards, Broadhead Enterprises Inc. had a participation rate of 94.8% in its 401(k) plan—impressive considering the company does not use automatic enrollment. Since then, the company has acquired another advertising agency with 40 employees, so the current participation rate is 91.1% until the new employees who are eligible get enrolled.

Asked how they’ve been able to achieve the high rate, Steve Renier, senior vice president, talent, says, “It’s education, education, education.”

In October of 2019, Broadhead hired a local women-owned adviser firm, 401(k) Plan Professionals. Employees are provided with a deeper understanding of the value of their retirement benefits through group and individual education. “Broadhead is an ad agency primarily in agriculture, food and wellness. Creative people might get overwhelmed by finances, so we try to help them make decisions,” says Renier. “The 401(k) Plan Professionals team makes concepts easy to understand for employees.”

The advisers collaborate with Broadhead’s retirement plan committee to create an annual education plan for both plan participants and the sponsor. “Meeting the participants where they are—with Zoom, webinars, on-demand learning, etc.—has been a key aspect of this education planning, too,” says Renier. “The open-door policy that the participants have with the advisers is crucial to deepening their understanding and making sure the retirement benefit is fully understood and valued.”

Broadhead also reaches out to employees who are not participating to see if they have questions or need help with enrollment. “We try to eliminate any hurdles or barriers,” he says.

Jessica Ballin, a principal at 401(k) Plan Professionals in Edina, Minnesota, says internal surveys over the last three years have shown that Broadhead’s employees rank their 401(k) as the most-valued benefit. She say the firm attributes this to the depth of understanding their employees now have of the benefit due to the education and support they’ve introduced.

Retirement plan committee members regularly attend fiduciary training and educational webinars hosted by 401(k) Plan Professionals so they can stay current and provide the highest level of fiduciary care to the plan and participants.

Renier adds that the 401(k) match of 50% of the first 8% of employee contributions also incentivizes participation, as well as higher savings rates. “This match structure is working, as the average deferral rate today is 12%,” he says. The 401(k) match is 100% vested immediately. “We have a lot of younger people that work here on their path,” he says. “If they choose to go get different experiences somewhere else, we want to make sure they are leaving here with something.”

The Minneapolis firm is also employee-owned. Currently 20% of the agency is employee-owned, and every year 2,500 shares are contributed to the Employee Stock Ownership Plan. The plan was introduced in 2018, and a “very engaged” internal ESOP committee was established. The committee wants employees to be aware of this benefit, and it holds several creative events each year.

Renier talked to PLANSPONSOR immediately prior to the annual event where the company’s share price would be announced. The ESOP committee has a share price guessing contest, and the winner gets $500.

Dean Broadhead, Renier’s boss and an active owner, holds a couple of sessions with employees each year to discuss why the firm has an ESOP and how it works. For ESOP month in October, the company makes time in its Monday morning meetings each week to highlight and share facts about the ESOP.

In addition, the ESOP committee hosts an ESOP breakfast (eggs, sausage, orange juice and pancakes) to increase awareness about the company’s ESOP offering. At one talent show, an employee wrote and performed his own lyrics to “ESOP” to the tune of “YMCA.”

“When we started the ESOP, we considered the incentive of ownership and that it would be a great retention tool,” Renier says. “But we also thought about the financial/retirement benefit to employees. It is important to reward employees.”

One way Broadhead rewards employees that Renier highlights is through a “Benefit Connect Stipend” of $150 per month, or $1800 per year, per employee. Renier says it can be used for many different things, such as funding a 529 plan, repaying student loan debt, funding a health savings account or paying for parking. He says around 25 of Broadhead’s employees are using this stipend toward student loan debt. “This alleviates a bit of financial burden each month for employees which, in turn, allows them to be more aggressive with saving into their 401(k), as it makes more money available to invest,” he says.

—Rebecca Moore