“Our founder was adamant about taking care of family and employees so they could have sufficient funds to leave this place to be able to play with their grandchildren,” says James “Jim” A. Goff, CEO of Landsman Development Corp., a real estate developer of primarily affordable housing, in Rochester, New York.
Ninety-three percent of all employees participate in the firm’s 401(k) program, which includes a 25% match for the first 4% invested; Landsman also provides discretionary profit sharing.
With 140 employees, including a large percentage of low-wage personnel, the plan sponsor puts a focus on participation education. At least three times a year, Landsman closes its doors, brings in interpreters for its many Spanish-speaking employees, and holds mandatory educational meetings at its headquarters and several remote locations. With plan adviser Mark Eidlin, wealth management adviser and senior vice president for Merrill Lynch Global Wealth Management in Pittsford, New York, Goff speaks to the group about the importance of retirement savings, understanding investments and the profit-sharing plan. “We like to get people focused on ‘what’s in it for me’ and ‘what’s in it for me financially,’” Goff says.
“Jim puts a huge priority on making sure that the employees understand the program, understand how it’s connected to the company and how the world at large affects what’s going on in their investment accounts,” Eidlin says.
The educational effort has returned dividends. Landsman’s success rate with the traditionally less-involved ages 20-to-29 group is 100%, and this year the company plans to focus on employees ages 50 through 60.
Related to investment education, Landsman offers participants access to Merrill Lynch’s Goal Manager program, an asset-allocation and rebalancing service. Eighty-eight percent of participants use the service, which has raised the average participant holding from less than three investments to 9.4 as of the end of last year, Eidlin says.
Education is used in less conventional settings, as well. In 2012, the plan added automatic enrollment at a contribution rate of 2% plus a match, with the option to opt out—but Landsman makes that difficult. Leaving the plan requires a meeting with Goff or the company’s human resources (HR) manager.
Likewise, the corporate savings culture makes it difficult for participants to remove money from the plan before retirement. Landsman has a 401(k) loan provision, but, unlike in most plans, participants are unable to initiate a loan with a recordkeeper’s customer service representative or online. If a participant wishes to initiate a loan, he must do so in person with Goff. Landsman does this to ensure the participant understands the terms and conditions of the loan and then hear about alternatives for financial redress.
Such efforts by Landsman underscore the company’s concern about its employees. Eidlin concludes, “The rate of participation is due to the coordinated effort to move participants forward.”
—Judy Faust Hartnett
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