The Washington State Board for Community & Technical Colleges in Olympia, Washington, knows that providing the best service to students means having the best faculty and staff. According to John Boesenberg, deputy executive director of human resources (HR) for the board, the retirement plan is a central part of its compensation program, as well as a way to attract and retain the best employees.
The board sponsors two 403(b) plans—one mandatory and one voluntary—that are the primary retirement offering for employees. Participation in the mandatory plan is 100%, with every employee required to contribute 5% of salary. The mandatory plan includes a graded match schedule based on participant age: a dollar-for-dollar match of up to 5% for those 34 and younger, up to 7.5% for those 35 to 54, and up to 10% for those 55 and older. The voluntary plan is simply a discretionary savings plan with no match offered.
With a 100% participation rate and generous match, the plan still had one area that could be improved, the board determined: the plans’ investment lineups.
In fall 2012, it reached out to TIAA-CREF, “which brought a team of subject matter experts in investments to the table,” Boesenberg explains. The end result was a three-tiered investment menu of TIAA-CREF fixed and variable annuities, lifecycle funds and a diverse array of mutual funds from a variety of investment managers. There were 10 new funds and 18 TIAA-CREF funds administered on the company’s own platform.
“We ended up with slightly more funds—there were some market sectors we hadn’t been offering in the past,” Boesenberg says. “Part of it was that, because we had offered the TIAA-CREF products in the past, there might be some concerns by staff that we were stepping away from a trusted partner.” Boesenberg says the board will try to simplify the menu in the future.
With the change in offerings came a big participant communication effort. Each college’s officers were educated about the revisions at various meetings; then they started engaging participants, including via one-on-one meetings. From a “snapshot” taken four months after implementation, there were 181 new enrollments; 706 participants increased their deferral amounts, and 200 participants rebalanced or reallocated their portfolios.
“When I think about what initiated this process, it was really focusing on our business of serving students. That happens through people, so our retirement plan ensures the success of our business,” he concludes.
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