2022
Nonprofit DC

Healthcare Financial Management Association

FINALIST
Westchester, Illinois
Joe Fifer
President and CEO
  • Plan
    401(k)
  • Total Plan Assets
    $22.5MM
  • Number of Participants
    87
  • Participation Rate
    99%
  • Average Deferral Rate
    9.6%
  • Default Deferral Rate
    3%
  • Default Investment
    The Standard’s Mainspring Managed Service
  • Automatic Enrollment
  • Automatic Escalation
  • Employer Contribution
    7% of base salary after one year of service
  • Providers
    Recordkeeper: The Standard; Adviser: Sikich
  • Financial Wellness Educator
    Sikich


The 401(k) plan of the Healthcare Financial Management Association has a lofty 99% participation rate and a 9.6% average deferral. The Westchester, Illinois-based nonprofit does have a financially savvy staff, since the organization’s mission is to help individuals working in health care financial management and their organizations achieve optimal results by providing practical tools, education, industry analysis and strategic guidance.

But demographics alone don’t explain the employee engagement. “That might be part of it. But I’d like to think that it’s more because of the amount of employee education that we do,” HFMA President and CEO Joseph Fifer says. “It’s a contemporary paternalistic or maternalistic approach, to teach them how to prepare for retirement. As a country, I don’t think we’ve seen the full impact of the shift from defined benefit plans to defined contribution plans. I’m concerned that people in this country don’t understand the need for their personal preparation for their retirement. So we want our employees to know what they are getting into with a defined contribution plan, and to understand the tools that we provide them to someday have a comfortable retirement.”

The HFMA plan added automatic enrollment and automatic increases in May 2013. Then as now, the plan had a 3% default deferral rate. “We want to lessen the barrier to entry in the plan, and we encourage folks to inch that up with automatic escalation,” Fifer explains. “A 3% deferral isn’t that noticeable to their paycheck, and then the next year it goes up to 4%. If employees can put a piece of their annual raise into increasing their deferral, it provides a way for them to end up with a nice amount of money saved.”

Instead of a match, the employer makes a 7% contribution to a participant’s account annually, starting after one year of service. Asked why, Senior Vice President & CFO Joyce Zimowski says, “I think it gets back to the culture we’ve established in the organization.”

“We know that is on the high side for an employer contribution, and we’ve talked frequently about whether that is the right percentage,” Fifer adds. “We continue to go back to [the fact that] we have very high participation in our plan, and employees really do value that contribution we make to their retirement savings. We’re a not-for-profit organization that is competing for talent with all kinds of other employers. As a nonprofit, we don’t have the ability to offer equity in the organization as a benefit. So a 7% contribution doesn’t feel like it’s too rich to me.”

To encourage employee engagement, plan adviser Sikich does group educational meetings multiple times per year, and participants can sign up for a one-on-one meeting. Also, HFMA leadership often speaks to staff members about the 401(k) plan. “We just talk a lot about the importance of saving for retirement,” Fifer says. “Every single all-staff meeting we have—and we have those meetings almost monthly—we talk about culture management. And part of our culture management is this whole discussion of retirement planning. We want to have a retirement benefit that says to our employees, ‘We do care about you.’”

Judy Ward

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