Corporate DC >$70MM – $150MM

International Dairy Queen

Plansponsor of the year winner icon WINNER
Bloomington, Minnesota
Danielle Dubois
Director, Global Rewards and HR Systems
  • Plan
  • Total Plan Assets
  • Participants
  • Participation Rate
  • Average Deferral Rate
  • Default Deferral Rate
  • Default Investment
    T. Rowe Price target-date funds
  • Automatic Enrollment
  • Automatic Escalation
  • Employer Contribution
    100% of 1% and 50% of the next 5%
  • Providers
    Recordkeeper: Empower Retirement; Adviser: Advanced Capital Group; Custodian: Great-West Financial
  • Financial Wellness Educator
    Empower Retirement

International Dairy Queen, Inc., headquartered in Bloomington, Minnesota, is a subsidiary of Berkshire Hathaway Inc. and the parent company of American Dairy Queen Corporation and Dairy Queen Canada, Inc. Through its subsidiaries, IDQ develops, licenses and services a franchise system of more than 7,000 locations in the U.S., Canada and more than 20 other countries.

Although IDQ covers only 526 participants in its 401(k) plan, the company has incorporated multiple features that are typically found only in larger plans. These include, for instance, part-time employee eligibility; Immediate vesting of the company match; both automatic enrollment and deferral escalation; and periodic automatic enrollment sweeps.

Ideas for plan benefits and features come from multiple sources, according to Danielle DuBois, IDQ’s director of global rewards and human resource systems. The company has an organization-wide “listening strategy” in place that actively solicits participants’ feedback on their experience with the plan and its benefits. Benchmarking the plan also provides ideas. “We do a benchmarking analysis every other year, for our benefits, where we compare our plan with the market,” says DuBois. “Sometimes we’ll notice trends in the market that are changing and evolving.”

The plan’s recordkeeper, Empower Retirement, is another source of suggestions, says DuBois. Jim Noble, Empower’s Philadelphia-based relationship manager who serves IDQ, explains that DuBois and the company’s leadership are always looking to improve the plan. Several years ago, Noble was tasked with re-examining the plan’s design, which he says was “good” at the time, with the stated goal of making it excellent.

Every feature was up for consideration, Noble says. “For instance, we considered changes to eligibility and company match vesting rules to determine how employees might take advantage of the plan sooner.” Each proposal, such as a change in the matching schedule, was subject to a cost-benefit review before adoption. “We did an analysis for them to show, if you were to expedite the match, here’s what you would be looking at, from a cost perspective,” he explains.

DuBois says IDQ is always working to improve the plan. Each year, the company conducts an annual review with Empower to evaluate design initiatives, plan metrics, and benchmarks to “improve upon the overall retirement plan offering,” DuBois says. IDQ also regularly compares its third-party administrator’s services with other firms’ offerings.

The benchmarking and review process has resulted in multiple changes over the past 12 to 24 months. These have included: increasing the automatic enrollment default savings rate from 3% to 6%, then re-enrolling all those deferring less than 6%; periodically re-enrolling non-savers and under-savers—i.e., all saving from 0% through 5%—so they can take advantage of the full company match; increasing the automatic escalation cap from 6% to 10% for all new and previously auto-enrolled employees; and reducing new participants’ entry and match eligibility date from the first of the quarter after one year of service to the first of the month after 30 days of service.

These changes have worked, says DuBois. The participation rate has increased, average deferral rates are higher, and more employees are receiving the full company match.

IDQ develops metrics for each revision to plan design, DuBois explains. “We attach a key metric to all plan design changes to make sure we’re driving the intended results,” she says. “For example, when we did an enrollment sweep and increased our auto-enrollment rate from 3% to 6%, we also measured how much of that was successful, including how many of those people kept their contribution rate at 6%.”

A review determined that 86% of the individuals who were included in the sweep accepted the higher, 6%, rate, which told DuBois the change was successful. But the measurement wasn’t a “one-and-done,” Noble emphasizes. “Naturally, we can capture the employees who were swept in and went through the process right after it happened,” he says. “But let’s look at that another six months from now to see if those employees drop out or they just stay with the same [percentage]. And so, we measured six months out, as well. We want to get as many people as possible investing and saving for retirement, so it’s an ongoing process.”

Ed McCarthy
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