Hendrick Automotive Group, LLC

NOMINATOR COMMENTS

Recently named one of the “Best Dealerships to Work For” by Automotive News, Hendrick has employees across 13 states, 131 franchises and 94 locations.

Hendrick’s 401(k) plan boasts a 95% participation rate, compared with Vanguard and industry benchmark rates of 79% and 54%, respectively, and 74% of Hendrick employees take advantage of the automatic increase feature. Optimizing benefits with smart plan design is an important facet of Hendrick’s strategy to attract and retain the best employees, which is critical in retail, where turnover is inherently high. Optional features that help make the plan more competitive include advice from Vanguard, Candidly and Your Money Line, a financial wellness service that offers free one-on-one coaching on personal finance topics. Any new service first undergoes a rigorous approval process to determine its potential benefit to participants. Additionally, Hendrick’s plan consultant conducts regular reviews of the fund offerings and makes suggestions for changes based on participant cost savings.

Seth Davis, Retirement Plan Administrator, Hendrick Automotive Group, LLC
Photograph by Matt Kalinowski

PLANSPONSOR: How would you describe your company? What is its work or mission? Is there anything unique about its demographics?

Hendrick: Hendrick Automotive Group is the largest privately held automotive retail organization in the U.S. Yet, despite its size, the company feels more like a close-knit family. That feeling is rooted in a strong culture and a clear set of core values that prioritize people above all else. Employees are viewed as the company’s greatest asset, with a focus on supporting them in achieving their personal, professional and family goals.

PLANSPONSOR: What are you most proud of in relation to your retirement plan offering?

Hendrick: What I am most proud of is how our automatic enrollment and automatic increase features have helped more employees take steps toward a secure retirement. Before we introduced these features in 2011, participation in the plan was around 70%. Today, it’s at 95%, with 74% of participants benefiting from auto-increase. These simple tools have made a meaningful difference for our teammates.

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.

Hendrick: Over the past few years, we have implemented several initiatives to improve the plan. We replaced Financial Engine’s managed accounts with Vanguard’s advisory services, providing participant advice and money management at a lower cost. The eligibility age was lowered to 18 from 21, allowing more than 400 part-time and full-time participants to start saving earlier. The employer match doubled, which led to a 98% increase in participants maximizing their match, and the automatic escalation cap increased to 15% from 10%. We enhanced catch-up contributions for those age 60 through 63 and increased the cash-out limit from $5,000 to $7,000, per the SECURE [Setting Every Community Up for Retirement Enhancement] 2.0 Act.

We added Candidly, a student loan debt benefit, through Vanguard’s platform and promoted Vanguard’s Cash Plus account for emergency savings. Given the recent interest rate environment, we replaced the current stable value fund with a new stable value separate account; this offers higher yields and a lower expense ratio. We reduced participants’ recordkeeping and investment fees to $45 from $48 annually.

To better connect with employees who are not at their desks or using computers, we recently acquired a data messaging component through our human resource information system. Once implemented, this feature will enable us to send important information via text messaging. This improvement will enhance employee engagement and streamline communications for thousands more employees.

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

Hendrick: My team and I recently earned the Certified Plan Sponsor Professional designation through the Plan Sponsor Council of America, which requires continuing education throughout the year. We have a subcommittee that meets three times per year with Vanguard and Creative Planning to strategize and evaluate the plan’s effectiveness, including concerning investments and fees. The full committee, which includes top executives, meets in the fourth quarter with Vanguard and Creative Planning to review the plan, assess its operations and compliance, and receive fiduciary training.

PLANSPONSOR: What does winning Plan Sponsor of the Year mean to you and your employer?

Hendrick: We are honored to receive the Plan Sponsor of the Year award and grateful to be recognized for our commitment to supporting our employees’ financial well-being and retirement readiness.

When I first joined Hendrick Automotive Group, in 1995, the 401(k) plan was just a couple of years old. It has been incredibly rewarding to witness its growth over the past 30 years and to be part of a team that consistently puts our people first. This recognition is a meaningful reflection of that shared effort and dedication.

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.