Aunt Millie’s Bakeries

Aunt Millie’s Bakeries has been baking bread, buns and rolls for over 120 years. The family-owned company, headquartered in Fort Wayne, Indiana, operates five bakeries across three Midwestern states. It has both union employees, covered by 30 different collective bargaining agreements, and nonunion employees.

Eighty percent of the employees are blue collar, many working in the five production plants or driving delivery trucks. The average worker tenure is 11 years, and the company has many 25-year and 30-year employees, says Judy Bobilya-Feher, the company’s chief financial officer and retirement committee chair, a 30-year employee herself.

Because many employees stay so long, their Aunt Millie’s 401(k) is often their largest retirement asset. The company’s union plan has a 98.7% participation rate and the nonunion plan, a 97.9% participation rate—up from 68% and 59%, respectively, in 2012. The average deferral rate is 7.4% in the nonunion plan, 7.7% in the union, and retirement readiness has improved significantly: from 73% to 79% in the nonunion plan, and from 58% to 83% in the union plan, over the past 10 years.

“Even though Aunt Millie’s is family owned, and we want to hold onto the family—and caring—perspective that our mission statement [describes], we can’t act like a small company,” Bobilya-Feher says.

The sponsor started making plan design changes in 2012 to help improve participation and gradually added more features. “We attacked plan design with gusto,” says Brea Dantin, the bakery’s retirement plan adviser, with ProCourse Fiduciary Advisors. “Judy went to a provider conference and came back so excited, thinking about what the company could do and try for its employee population.”

Bobilya-Feher shared the ideas with the 401(k) committee, which then debated how to implement the changes. After discussing whether to start automatic enrollment at 1%, 2% or 3%, for example, the group decided to jump in at 3% with the nonunion plan and see what happened. “We saw minimal opt out,” Bobilya-Feher says. “What I learned is there are all these tools that have been put into employers’ hands, and we’re empowered to take action to help our participants. We needed to start moving the needle to make progress with our members.”

The sponsor then auto-enrolled the union plan at 3% and eventually raised both plans’ rate to 4%; it may boost the amount to 5% next year.

“Once the committee saw the nonunion stats go through the roof, it was enthralled with the good news and the feeling of truly affecting the employees’ lives,” Dantin says. “From a family-owned company perspective, it now felt even more like family. The committee was putting employees on a path that would make them more financially successful.”

The sponsor also increased its matching contributions and lessened the service requirement so part-time employees could contribute to the plan. Many of the merchandisers, loaders and employees in the stores work only part time. The sponsor found that some work a second job to receive supplemental income and could afford to save more money for retirement. “Why not enable them to participate?” Bobilya-Feher says. “We see where we had some hourly people putting aside a significant percentage of their paychecks.”

Financial education has also been a top priority, and the sponsor has needed to get creative to reach employees in such a wide variety of job types and locations. Last year, it ran an education campaign to urge participants to review and update their beneficiary designations. “Now that there are more and more people in the plan, we needed to check that beneficiaries were being identified,” Dantin says.

The sponsor produced floor stickers for that purpose and distributed emails and other notices. It gave out fortune cookies with a messages about protecting your beneficiary. “It was buzzing around here and got a lot of attention,” Bobilya-Feher says. The campaign was a success: Almost 28% more beneficiary forms are now on file.

“It’s more than building the 401(k) plan design, but also education in helping employees financially prepare for retirement,” Bobilya-Feher says. Before tightening the nonunion plan’s loan policy to allow no more than one loan at a time, the sponsor focused on financial education to promote emergency saving and introduced a program about building an emergency fund.

“Education is great, especially when you see the lightbulb turn on, and you know you’ve helped somebody on their financial path,” Dantin says.

—Kimberly Langford