Marvell Technology, Inc.

In 2021, the retirement plan of Marvell Technology, Inc., reached a significant 401(k) milestone: It passed $1 billion in assets.

Ask Lindsay Molina, benefits manager, North America, at the technology company’s Santa Clara, California, headquarters, and she attributes the growth to two key factors. First, several acquisitions “welcomed new employees into the company.” Second is the appeal of the plan itself, which stresses participation, plus “strong savings opportunities that Marvell encourages participants to take advantage of.”

And take advantage participants do. Ninety-six percent are enrolled in the plan and average a saving rate of 15% and a balance of $198,000. “When compared with Marvell’s peers in the industry,” Molina says, “both the participation and savings rates far exceed those other plans.”

The plan’s “thoughtful design,” she says, is what has been attracting people to engage. She notes a string of enhancements over the past two years, which keeps participants mindful of the plan, as well as providing new or easier ways to save.

For instance, the sponsor increased the plan’s employer match twice and raised the automatic-escalation cap from 10% to 15%. The latter applies to all participants who were automatically enrolled, Molina says, and “significantly affected retirement readiness for this population.”

With an eye toward user-friendliness, Marvell simplified its match formula, which, Molina says, some employees found confusing. The original rate was 100% of 4% plus 50% of the next 2%. To ensure people understood all the company was offering them, it streamlined the benefit to 100% of up to 5%. Further, it changed its annual true-up match to a quarterly one, enabling participants to receive every match dollar they were due with less delay.

A significant addition was a managed account service, offered by Marvell’s adviser SageView Advisory Group LLC and Morningstar Investment Management LLC, Molina says. Participants can receive free advice on their account—or professional management for a fee. Pre-retirees can access additional features such as a sustainable spending plan, at no additional charge.

Puttra Som, director, relationship management at recordkeeper Charles Schwab, points to two more thoughtful changes: For one, Marvell increased the maximum amount—in total compensation from salary and bonuses—participants may defer, from 50% to 75%.

“This is a very proactive approach in terms of retirement readiness,” says Ali Taner, vice president, total rewards, at Marvell. “We are definitely on the higher end of the market in terms of automatic deferrals, and changing % deferrals that Puttra mentioned from 50% to 75% for salary and bonuses; that’s also around the 75 percentile of the market, so these are all what I would consider best practices.”

For the second change, Som says, Marvell added a traditional after-tax-savings election option. Almost $9 million in contributions to date have been made to this election type. “The after-tax feature has also driven the savings level of participants,” he says. “We see some good participation here.”

Making the whole process easier was the addition of automation, converting traditional after-tax savings to Roth inside of the plan on a per-pay-period basis. Over 68% of participants deferring after-tax now use this feature. Molina sees the Roth conversion especially as a way that Marvell can remain “on the cutting edge.”

“We like to make sure we have the best programs available to our employees,” she says. “Marvell participates in a lot of benchmarking groups[, and] we started to hear about other large employers bringing in after-tax. Then some employees started asking us about it. We worked with the Schwab team to add the feature to our plan. Because it’s something growing in the industry, we knew we wanted to stay on top of it and make it available to our employees.”

To keep employees current on updates to the offerings, Marvell leverages a range of communication media, Molina says. These include live and on-demand virtual webinar events, “one-to-one” office hours and a comprehensive public benefits site—marvellbenefits.com/401k—that features dynamic retirement plan content, along with weekly newsletters and mailers to participants’ homes. Participants may research common financial topics on “My Financial Guide,” a central dashboard that also provides personalized educational resources, relevant tools and suggested next steps.

Such features can only do so much without a strong investment lineup and diligence in monitoring that and the plan’s operations. “Continued focus on fee leveling and diligent review of the plan lineup has resulted in several fund changes, which lowered participants’ investment costs,” says the sponsor. Notably changing the plan’s qualified default investment series saves them $125,000 annually.

—Karen Wittwer and Noah Zuss