County of Los Angeles

The County of Los Angeles’ 457(b) plan has 86% participation and its 401(k) plan, 83% participation. That’s an impressive feat, considering that more than 95% of full-time, permanent LA County employees are also in a defined benefit plan. Moreover, neither defined contribution plan uses automatic enrollment, mostly due to California’s anti-wage-garnishment laws.

“Often, when a DC plan is supplemental for public employees, you see participation rates in the 30% to 50% range,” says Dan Morrison, executive vice president and head of government and Taft-Hartley markets at Empower, which has provided retirement services for the LA County plans since 1997. For another potential hindrance to involvement with the plan, the county’s more than 139,000 public employees and retirees are spread across 4,000-plus square miles.

Without the automatic enrollment, LA County has to depend on engaging the employees to increase participation. Over the past five years, much of the engagement effort has centered on moving from Empower providing group and individual meetings in person to it meeting one-on-one with employees online—a shift the county began in 2019, before the pandemic. Empower has eight local, dedicated counselors who meet only with LA County employees; however, the in-person model limited how many employees the counselors could help.

All full-time, permanent employees are eligible to participate in the 457(b) plan. The 401(k) plan’s eligibility is limited to certain job categories, mostly in management. LA County’s part-time, temporary and seasonal employees participate in a Social Security replacement plan under a separate 457(b) plan designed for that purpose.

“We had really good participation rates, but we’d been stuck at those for a while,” says Susan Moomjean, county benefits manager, in Los Angeles. Expanding the ability of employees to get one-on-one help through Empower “was an opportunity for us to cast a wider net and to educate our employees so they can make informed decisions about participating,” she says.

By 2023, Empower had met with nearly 35,000 LA County participants. “That’s roughly a 25% increase over the number of participants we met with in 2019,” Morrison says. “And, of the 35,000 we met with last year, about 20,000 [57%] were in group meetings, and 15,000 [43%] were in one-on-one meetings. Pre-COVID, about 80% of the LA County participants we met with were in group meetings.”

Participation in the 457(b) plan rose from 84% in 2019 to 86% at year-end 2023 and in the 401(k) from 78% in 2019 to 83% in 2023. Asked what lessons the county has learned about motivating employees to engage with the one-on-one virtual meetings, Morrison says, “A big one—and a big shift from pre-COVID to today—is that the county and Empower are using data like we never have before.”

For example, the two entities identified three departments with the lowest 457(b) participation rates among the county’s 43 departments, and, Moomjean says, this year the county is “blitzing” those departments to encourage employees to sign up for an in-person or virtual meeting with Empower. She hopes down the line to do similar, targeted outreach to departments whose employees under-utilize the plans’ opt-in automatic escalation. But for now, she would like to see participation reach at least 90% in the 457(b) and 401(k) plans. As she puts it, “Step one is, let’s get people in the plan.”

—Judy Ward