2022
Corporate DC $25MM – $70MM

Rite-Solutions

FINALIST
Middletown, Rhode Island
Chad Seelig
Chief Financial Officer
  • Plan
    401(k)
  • Total Plan Assets
    $45.6MM
  • Number of Participants
    419
  • Participation Rate
    92%
  • Average Deferral Rate
    7.17%
  • Default Deferral Rate
    6%
  • Default Investment
    T. Rowe Price target-date funds
  • Automatic Enrollment
  • Automatic Escalation
  • Employer Contribution
    100% of the first 6%
  • Providers
    Recordkeeper: T. Rowe Price; Adviser: Strategic Retirement Partners; Third-party administrator: The Angell Pension Group
  • Financial Wellness Educators
    T. Rowe Price, Strategic Retirement Partners

 

In the world of government contracting, Rite-Solutions, Inc., a U.S.-armed-services-disabled-veteran-owned company focusing on the design, development and deployment of mission-critical software and systems, has been considered a “small” company by industry standards.

Chad Seelig, chief financial officer and 401(k) committee chairman at Rite-Solutions, says the company’s significant growth over the past few years means it will be moving into a much bigger pond and face tight competition from large, well-known players. Think: Lockheed Martin, Boeing, General Dynamics, Raytheon, etc. It’s a challenge the technology firm, headquartered in Middleton, Rhode Island, is ready to take on, in no small part due to its ability to attract and retain top talent, Seelig says. This ability, in turn, ties back into the company’s benefits and compensation policies, plus the fact that firm leaders have invested heavily in the company’s 401(k) plan as part of a significant recruitment initiative.

“The work we have done on the 401(k) plan represents a critical step to keep pace in a competitive industry,” Seelig says.

Until recently, a substantial percentage of Rite-Solutions’ workforce was made up of former members of the military, who were eligible for full pensions and, therefore, not fully reliant on the 401(k) to meet retirement income needs. The hiring of some 100 new staffers over just a few short years has brought in younger employees who don’t have the same legacy military benefits, and the 401(k) has thus become an important recruitment tool to help with the company’s growth, both to attract and retain staff.

“Achieving the plan’s high participation rate has been an outstanding accomplishment given that the younger workforce is saving for retirement while also challenged with student loan debt,” Seelig says, citing the fact that the company has enthusiastically embraced a progressive plan design.

Under a policy adopted in January 2021, new employees are enrolled at a 6% contribution rate, an increase from the 3% level that was set when the plan was still viewed as supplementary. With automatic enrollment, the plan’s participation rate has increased from 77% to 92%. The company also increased its matching contributions by 50%, implementing an enhanced safe harbor match of 6% in a change that took effect in January 2020.

Susan Borden, a Rite-Solutions vice president in human resources and the 401(k) plan administrator, notes that new employees who do not make an investment election are now defaulted into an age-based target-date fund investment. The latest plan data indicates that some 72% of plan participants are now 100% invested in a single target-date investment.

Beyond these plan design reforms, Rite-Solutions has implemented highly effective participant education and communication efforts, says Matthew Warfield, a vice president and relationship manager with the plan’s recordkeeper, T. Rowe Price.

“During the pandemic period, they offered timely seminars on a range of financial topics, including market volatility, Roth deferrals and pre-retirement planning,” Warfield recounts. “They also provided customized education sessions on financial wellness and investing basics, and they have leveraged the T. Rowe Price ‘Visualize Retirement’ program.”

Behind the scenes, Rite-Solutions also implemented changes to ensure every decision the team makes is in the best interest of employees, Seelig says. This includes the hiring of The Angell Pension Group as the plan’s third-party administrator and Strategic Retirement Partners LLC as its 3(38) fiduciary investment manager—all part of an effort to ensure fiduciary responsibility over the long term. Further, following a rigorous due diligence process, the team hired AAFCPAs to bring greater expertise to the plan’s audit process. The company also recently conducted extensive recordkeeper and adviser cost benchmarking, and the team is in the process of implementing fiduciary education for committee members.

“Rite-Solutions might be deemed a smaller fish moving into a bigger pond, but Chad and the investment committee are positioning the 401(k) plan to help with recruitment in a tighter labor market,” Warfield says. “Even more important, the team is ensuring that employees have a valuable benefit that can serve them for decades to come. Chad and his team are always pushing us to try and find the next thing we can improve on. They are constantly coming up with new items to discuss and consider.”

For his part, Seelig commends the plan’s service providers for their ongoing collaboration.

“Our philosophy is to put the right people at the table,” Seelig concludes. “We know we can’t be experts on everything, so when we do give someone a seat at the table, we are very careful and rigorous in that selection. This is true across all the providers, from the adviser to the third-party administrator.”

John Manganaro

E_DEPRECATED Error in file nav-menu-template.php at line 533: Creation of dynamic property WP_Post::$current_item_parent is deprecated