PLAN CONSOLIDATION: Over time, through mergers with, and acquisitions of, other health care providers, North Shore–LIJ Health System collected 27 retirement plans, including 15 defined benefit (DB) plans and a 401(k) from a for-profit entity.
In 2013, it realized its retirement plans had become difficult to manage: Some were active, some were frozen, and each required separate administrative efforts, fund monitoring and fee payments. More importantly, says Gregg Nevola, vice president of Total Rewards at North Shore–LIJ, the health system could not guarantee that all of its employees had access to the same retirement plan benefits, investments, and educational tools and resources. So, a year ago January, it started to consolidate its retirement program.
Last April, the North Shore–LIJ 403(b), 401(k) and 457(b) plans were moved to a new service provider, Transamerica Retirement Solutions; this process was finalized as of December 31, says Dijana Predich, North Shore’s director of benefits. The system not only changed recordkeepers and moved assets but also consolidated plans. North Shore–LIJ merged four 403(b)s together, four 401(k)s into one, and three 457(b) plans—bringing 11 plans down to just three.
Nevola says that in some cases employees had two 403(b) accounts: one active and one frozen. A benefit of having one platform is employees can better monitor their progress toward retirement readiness. They are able to view one set of accounts and one set of fees, as well as use Transamerica’s online OnTrack tool to see how retirement ready they are.
To help participants understand their level of retirement readiness, the system partnered with Transamerica to provide a financial wellness education module. According to Nevola, at North Shore–LIJ, financial wellness is as important to one’s well-being as proper nutrition and regular exercise.
In the health system’s 403(b) plan, 89.4% of employees eligible for an employer contribution participate in the plan; the participation rate is 67.9% of all eligible employees, which includes union members who have defined benefit plans. The average deferral rate is 8% among those eligible for an employer contribution and 9.5% among all participants.
“From where we are today versus historically, I’m most proud of the level of engagement of employees,” Nevola says.
“We were able to engage a lot of employees who previously weren’t interested,” adds Predich. “That was really our goal, not just to streamline participation.”
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