National Federation of Independent Business, Inc.

NOMINATOR COMMENTS

I have been fortunate to work with the National Federation of Independent Business since 2004. In my 20 years of experience with them, I can confidently say that the organization has always put the retirement needs of its employees first.

The plan’s committee has always been early adopters of best practices, which include annual fee benchmarking with live bids, annual review of the investment policy statement and charter, and evaluation of cybersecurity practices by the plan’s providers.

Since the plan was adopted in 1996, it has included pre-tax and after-tax deferral options. Roth deferrals were added when allowed, and in-plan Roth conversions were added in 2011. The NFIB was also an early adopter of automatic enrollment prior to the PPA of 2006.

To encourage employees to save more, an extensive study on match stretching was conducted to analyze potential deferral increases with different match scenarios. As a result, the discretionary match was increased to match employee deferrals of 8%, up from the previous 6%. Average employee deferrals are at 8.09%.

Early adoption of access to a financial adviser for both in-person and virtual meetings has been a driver of the plan’s success. An annual education plan is created that includes plan education opportunities defined by calendar quarter. Initiatives include coordination of recordkeeper and financial adviser material; quarterly participant-focused webinars; quarterly newsletters; targeted email campaigns; and customized educational videos.

An extensive study of target-date funds was conducted to determine the best glide path for the plan’s employee demographics, which was then matched to screened target-date funds.

PLANSPONSOR: What challenges do you face in plan administration or participant engagement?

NFIB: Our company has a large, grassroots, “boots on the ground” sales force spread throughout the country, with commission-based earnings. Recognizing that this could lead to lower participation levels (and, based on our experience, because that division was experiencing lower participation levels), we were early adopters of auto-enrollment, with auto-escalation to 10%. This plan feature has boosted our participation rates to more than 90% for the last decade, with a current participation rate of 95.3%.

PLANSPONSOR: Please explain the ongoing governance efforts of those involved with the plan meant to ensure its compliance and effective operation.

NFIB: NFIB’s retirement plan administration committee meets quarterly to review the plan operations. The plan’s investment policy statement is the foundation for the quarterly review of funds offered by the plan. Also, plan benchmarking is done annually to review service provider and fund fees, as well as industry best practices. The committee members also complete fiduciary training annually and monitor how our service providers are responding to the increased need for sound cybersecurity policies.

This year, for our Plan Sponsor of the Year profiles, we are publishing Q&As based on the finalists’ applications and nominator comments. Responses are edited and may be paraphrased. In cases where the finalist self-nominated or, on its application, referred judges to the nomination for the answer, we have attributed those nominator answers to the plan sponsor.