Ithaca College

“During the pandemic we ended up, like many other employers, pausing our employer contribution for the retirement plan, in our case for the second half of 2020 and the first half of 2021,” says Elizabeth Mendez, senior director of benefits administration at Ithaca College, a private college in Ithaca, New York. “But when we came back, we were committed to our strategy of having a plan that really works for all of our employees.”

So after the 403(b) plan’s match returned, Ithaca College raised its employer contribution while also lowering the percentage employees need to contribute to get the full employer contribution. Additionally, the plan did reenrollments in June 2021 and July 2022, which resulted in participation reaching 98%. “We wanted to encourage our employees to get back into preparing for their retirement,” says Kirra Franzese, associate vice president and chief human resources officer.

The plan’s participation began rising substantially in 2013, when it implemented automatic enrollment at 5%, Franzese says. In 2021, the plan added auto-escalation at 1% per year, up to 15%.

Effective July 2022, the plan increased the employer contribution by 40%, from 5% of pay contributed to 7%. It also lowered the minimum deferral rate for matching to 3% from 5%. Previously, a participant who contributed at least 5% received a 5% match. Now, employees who contribute at least 3% get a 7% match. (A participant who contributes, but at less than 3%, does not receive a match.)

“We asked ourselves, ‘What can we do to make our retirement benefit more competitive and to support our employees’ retirement-savings goals?’” Mendez says. “We knew the economic challenges that our employees were having. We felt that reducing the required contribution to 3% could provide greater opportunities for employees who felt like that was more feasible for them.”

Following the first reenrollment in 2021, the 2022 sweep reenrolled eligible employees and participants contributing less than the default deferral rate at 3%. Of 129 employees reenrolled, just seven opted out, so the sweep had only a 5.4% opt-out rate. Ithaca now plans on annual reenrollment.

The employees were reenrolled into the plan’s default investment TIAA RetirePlus PRO, custom target-date funds utilizing flexPATH Strategies LLC as the 3(38) fiduciary investment manager. The target-date funds have a risk-based component: Employees get defaulted into a moderate portfolio for their target date but have the option to switch to an aggressive or conservative portfolio for that target date. As of November 2021, the target-date funds also have a TIAA guaranteed-income-product component, to provide for lifetime income in retirement.

“We communicated the reenrollment as, ‘This is for the benefit of employees, to help you prepare for your retirement,’” Franzese says. “The pandemic made a lot of people think differently about their future. For the most part, I think our employees saw the reenrollment as a way to better themselves and that we at Ithaca College were trying to support them.”

Adds Mendez, “We made it easy, so that people didn’t have to take any action. The nice thing is, all those who took no action ended up benefitting from that.”