PSNC 2019: Defining Success in Your Workplace Retirement Plan

From Left to Right: Rebecca Moore; Alicia Allement; Lynn Sweet; Chris Wellons; Elaine Parham; and Judy Faust Harnett. Photo by Matt Kalinowski

The first day of the 2019 PLANSPONSOR National Conference included a session dedicated to defining and pursuing success in workplace retirement plans.

The session featured four representatives from this year’s PLANSPONSOR Plan Sponsor of the Year awards program. They were Alicia Allement, benefits supervisor, General Health System; Lynn Sweet, benefits associate, Badger Mining Corporation; Chris Wellons, vice president of manufacturing, Taylor Guitars; and Elaine Parham, senior compensation manager at Southwest Airlines.

The group each talked about some of their most recent efforts to boost participant outcomes through the adoption of progressive plan designs, custom communications programs and third-party partnerships with specialist vendors.

General Health System

According to Allement, General Health System’s approach to financial wellness has been built on lessons learned from the non-profit’s previous efforts to address health-based wellness issues among the workforce.

Allement said a core component of the current financial wellness approach revolves around a partnership with a vendor called PayActive.

“We are an organization with biweekly pay, but that doesn’t always match up with when our employees’ bills or debts are due,” Allement said. “PayActive provides a very affordable solution that allows our people to access their pay early, which has helped our participants to avoid predatory payday loans and to reduce their bad credit card debt substantially.”

General Health Systems is is also working with a vendor called Vault that specializes in student loan repayment and optimization. This benefit has already proved to be a powerful recruiting tool, Allement said.

“We never close our doors as a hospital, so we have to meet the needs of a 24 hours workforce,” she noted. “We know that lips-and-ears communications are the most powerful communication method for our workforce, much of which is not at a desk for their job. Because of this, we require all our managers with direct reports to meet with their employees once per year to talk about retirement. When your boss is having that one-on-one talk with you, it’s so much more powerful than just sending out a mailing.”

Badger Mining Corporation

Given that the company has a predominantly blue collar workforce, Sweet said, the Badger Mining Corporation has taken many steps to use participant inertia to its advantage.

“We auto-enroll our employees at 6% and put it into a target-date fund,” Sweet said. “We also include an automatic deferral increase every January. We put the auto-escalation cap at 90%, so we keep going until they tell us to stop. Some of our employees are surprised to learn that they are saving, say, 12% before they even know it. It’s been really successful.”

Another progressive feature is that Badger does not permit loans from the plan.

Responding to an audience question, Sweet said the firm did have some concerns up front about such an aggressive automated plan design.

“We had a fear in particular about doing auto-increase. We debated it for hours. We were afraid of pushback and telling people what to do,” Sweet said. “In the end, though, we knew it was the right thing, and our employees have agreed. The opt-outs are always there but they are very few and far between.”

Some years ago, the benefits leadership decided there was a real need for one-on-one advice in the plan.

“We decided the first round of adviser meetings would be mandatory, and then every three years another meeting is made mandatory,” Sweet explained. “We feel this is so important to helping people get and stay on track. The meetings helped people move into the investments they should be in. it’s been a really good thing for us. We made it very clear to the advisers that cross-selling should not be any part of these mandatory meetings. We dictate what we want to happen in those sessions and what we don’t.”

Taylor Guitars  

One of the unique features of the Taylor Guitars retirement program that was discussed by Wellons is the fact that part-time employees are permitted to participate.

“We feel any employee deserves to generate wealth, whether full time or part time,” Wellons said. “This is why we sign up each new employee for the plan, right when they come in. We sit down and walk them through it. These things help us engage the younger workers and getting them on the right path.”

Southwest Airlines

Among other reasons, the Southwest Airlines retirement program stands out for its retention of a full-time employee of the retirement plan recordkeeper. This employee works full time to help educate and support new and established employees of the airline about the company’s generous retirement program.

“This person is just so dedicated and enthusiastic,” Parham said. “We have her performing new hire onboarding sessions every Monday. Every new employee sees her and engages with her, and she has  very unique way of connecting with employees and explaining our benefits.”

This individual also helps with pre-retirement workshops that go on. For these sessions, the recordkeeper also brings in an older individual who has retired and come back into the workforce.

“The pair are able to connect with younger and older workers, and together they have had a tremendously positive impact on plan performance,” Parham said.