Bread Financial

2023 was a defining year for Bread Financial’s 401(k) plan. That’s when the financial services company, headquartered in Columbus, Ohio, completely overhauled the plan to address a gap in its associate retirement saving.

More than a quarter of Bread Financial’s associates were saving nothing for their retirement, and they were stressed about their finances. In a survey, half of the company’s associates had said they felt “very” or “extremely” stressed on a typical day, money being the top reason. With the help of T. Rowe Price, the plan’s recordkeeper since last September, and BrightPlan, Bread Financial’s financial wellness partner since 2021, the sponsor made sweeping changes.

To start, the team moved the 401(k) plan, putting it under the company’s internal LivingWell umbrella. The holistic wellness program was already well known to associates, but the 401(k) plan had been separate from it. “Rebranding” the 401(k) under the wellness program enhanced associates’ trust in it, according to Lindsay Madaras, senior manager, associate well-being at Bread Financial.

“We didn’t want the 401(k) to be a typical corporate benefit,” says Madaras. “Our associates know and trust the LivingWell brand, so we incorporated the 401(k) into that program. [Doing so] also signifies that a 401(k) plan is more than just a benefit—it’s a pathway to living better.”

For its part, the recordkeeper co-branded its retirement plan communications to align with the dynamic and engaging branding developed for the LivingWell program, according to Beth Blasser Dietrick, senior engagement consultant at T. Rowe Price.

For another important step, Bread Financial adjusted its match, which was previously dollar for dollar up to 5%. A year ago January, the company moved to a $0.50 match for every $1 employees contributed, up to 6%, and added a 3% nonelective employer contribution.

Further, the company removed the six-month eligibility waiting period and began covering the plan’s recordkeeping fees. It already offered a self-directed brokerage account option.

Madaras says she believes the 3% nonelective contribution makes the 401(k) plan “inclusive for all associates” and that it nudges nonparticipants into the plan to help set a foundation for retirement. When associates receive communications about the free-money deposit, she says, they are also being reminded that the company offers a match. This can “inspire” them to start contributing a portion of their own pay toward retirement, she adds. 

In tracking participant outcomes, T. Rowe Price noted that, as of March 31 this year, participation had increased to 77%, up from 70% when the provider became recordkeeper last year. At year-end 2022, participation had hovered around 64%. 

“When I think of their program, it’s extremely comprehensive, well thought out and very pro-associate,” says Shaun McCloskey, relationship manager at T. Rowe Price. “And their marketing to associates is second to none.”

Now that participation is up, the sponsor wants to keep the associates invested. To that end, Bread Financial has expanded its relationship with BrightPlan for financial wellness solutions, including free advice from a certified financial planner, and a survivor support benefit. Unrelated to retirement are financial benefits offered through the company’s medical plan to help with fertility, surrogacy and adoption.

Looking to the future, Bread Financial has its eye on adding automatic features to its 401(k), in 2025. 

—Corie Hengst