La-Z-Boy, Inc.

NOMINATOR COMMENTS

La-Z-Boy faced several challenges with its retirement plan. Workers had low saving habits due to a 2% default deferral rate, no automatic increases, the lack of a Roth feature and a noncompetitive employer match. Just a few of the measures the company took to address these were to increase the match; introduce a Roth feature and in-plan Roth conversions; and adopt a qualified automatic contribution arrangement, raising the automatic enrollment default rate to 3% and surpassing the QACA requirement by implementing automatic escalation up to 9%.

In addition, in collaboration with its new adviser, Goldman Sachs Asset Management, it made investment lineup changes that resulted in a 30% decrease in investment management fees and added investments that cater to those near, or in, retirement that want greater-income-producing investment solutions. All participants have access to advice through the plan’s managed account default investment.

The continued focus on participant engagement also continues to yield positive results—e.g., more than 100,000 website sessions and close to 50,000 app sessions per year, showing an increase in engagement from 50,000 website sessions and only 600 app sessions in 2019. To date, 1,251 employees have taken a Financial Wellness Tracker assessment to receive a personalized action plan to help improve their overall financial health.

PLANSPONSOR: Please cite any noteworthy initiatives you have taken in the past 24 to 36 months that have produced results to improve your plan, and describe the results.

La-Z-Boy: In the past 36 months, we’ve implemented a number of measures to improve our retirement plan, including increasing the company match by 200% and conducting automatic enrollment, an automatic deferral increase and re-enrollments. In the past 24 months, we reduced the vesting schedule to two years from four years, and we implemented a number of the voluntary provisions of the SECURE [Setting Every Community Up for Retirement Enhancement] 2.0 Act, including increasing the maximum contribution for employees ages 60 through 63.

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

La-Z-Boy: We’ve established the Corporate Benefits Council, which is the fiduciary of the plan. The council meets quarterly with our investment adviser, Goldman Sachs, to review fund performance, plan design, compliance, and legislative matters.

PLANSPONSOR: Is there anything else you would like to share?

La-Z-Boy: The current macroeconomic environment and inflation force our employees to make tough choices regarding their personal finances. The company recognizes the importance of financial wellness and has made it a priority in our total rewards strategy.

Employees can meet with a financial wellness coach, and we hold webinars and in-person seminars about the 401(k) or other financial topics. Last year, participants attended more than 35 webcasts focused on their financial well-being.

We have a large workforce, the majority of whom are deskless, so tailoring communications and educational opportunities to meet their needs is a constant challenge. While most of our business is in manufacturing, we have a very large part in retail—more than $1 billion in annual revenue—which creates unique challenges in reaching employees. We’ve partnered with Bank of America/Merrill Lynch, having one of their representatives attend our monthly human resource meetings and provide awareness of our education, resources and tools. The HR managers then can pass that information along to employees and answer their questions about the offerings so they can gain the most value from them and the plan.

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.