The Principal has announced its 10 Best Companies for Employee Financial Security, an annual honor for employers that maintained or enhanced financial supports that overall have dwindled in the past few years as health care costs increased and budgets tightened.

2011 is the 10th consecutive year of the program honoring growing companies (five to 1,000 employees) for their commitment to employees' financial security through outstanding benefits, with a key focus on retirement.

Current statistics show the average worker must save 11% to 15% of pay through all sources over the course of their career to adequately replace income at retirement, making retirement education and empowerment all the more important, given the financial fallout from the recession.

"All 10 have personalized communication around their benefit program - not just group meetings, but one-on-one education that is typically delivered by the financial adviser," says Luke Vandermillen from The Principal, adding that defined contribution plan participation among the Principal 10 is 88%, compared to 70% for other companies.

He continues: "The benefit dollars are tight. Some people are trying to be as creative as possible and make those dollars go as far as they can. It's not just an HR function decision; it gets to the core values of these organizations that they look at their benefit programs for the most important assets in their company, their people."

One of those companies is Associates for International Research, Inc., a human resources consulting firm that offers a primary 401(k) into which all workers are auto-enrolled after six months, with AIRINC contributing 3% of pay. The AIRINC contribution goes up to 6% if an employee decides to make a contribution of his own. The company also has a profit-sharing plan if there is money left over at the end of the year.

"We're a niche consulting business, so to lose a senior or junior player is a loss of time and training. If you protect people and take care of them, they're happy to work here, and you get a greater level of commitment," says assistant controller Julia Pilleri. Although the down economy has left AIRINC looking for cost-saving strategies - like introducing a high-deductible health plan for its 87 employees - the company pays employees' entire deductible while saving money on premiums.

"The level of protection is enormous," she says. "If someone walked in here today and offered me the same job with $15,000 more, there wouldn't be enough money for me to leave AIRINC. It's an ease of mind; it's solid, good insurance."


What makes a winner

"Judges like it when companies provide a nonmatching contribution, and this year eight companies provide a nonmatching contribution - either a fixed contribution to the defined contribution plan or a profit-sharing contribution," Vandermillen says, noting specifically that "Water Environment Federation has a generous 100% match up to 7% with a 3% nonmatching contribution. Home Builders offers a money purchase plan with a fixed 8% contribution."

Winning companies also used employee surveys, focus groups and employee committees to understand employee needs and wants. Programs for younger demographics (such as 529 plans, adoption assistance and mortgage assistance) and for older demographics (100% paid long-term care insurance and phased retirement) were featured among the top 10.

Still, retirement security is the main priority among Principal 10 companies.

Greeley and Hansen, a Chicago-based environmental civil engineering firm, made the list by taking a "three-pronged" approach to retirement with a matching 401(k), profit- sharing plan and a pension plan that goes into effect automatically after five years.

"It translates in the bottom line. We're a niche player. We know our clients want the best people to solve their problems, so we look at the benefit programs to set ourselves apart to attract those people," says John Robak of Greeley and Hansen. "For the last few years, we've held the line, we've experienced increased costs, but we've absorbed those costs, we want to give them [employees] peace of mind. To capture new business is our human resources work. It's about our ability to retain the talent we have. The success of our firm allows us to reinvest, whether it's in our retirement plan or health care."

RED F Marketing, a Charlotte, N.C., advertising agency, provides a 401(k) with 100% matching up to 3%. The company has 35 employees, most of whom are under the age of 40, which adds a unique challenge.

"Part of the education piece is teaching them to look beyond today, and it's a hard thing for people of that age to learn because we're into immediate gratification," says HR manager Stacey Dennis, who frequently brings in speakers to talk to employees about overall retirement readiness and the importance of staying the course through market fluctuation. "We see the market going crazy, and they want to put it in cash, but the reality is that that's not effective."

Sara Garces, RED F owner and CEO, believes the firm made the list by breaking from the pack. "Advertising agencies aren't typically known for compensation from a cash perspective, so to balance that out is our benefits package. It keeps people here, especially in cases when they're headhunted by other organizations," she says. "It allows for peace of mind and greater productivity, maximum accountability and maximum flexibility, things in their personal life are being taken care of at a greater level."

Vandermillen says RED F's philosophy is similar to others among the top 10 - keeping top talent is worth spending the extra dollars on first-tier benefit programs, even in a down economy.

"When the CEO looks at these benefits and looks at the return on that investment, it comes up in the turnover rate for employees," he says. The average turnover rate for these companies is 9%, with the national average at 21%. "Employee turnover is a huge cost to a business, and it's where these organizations can justify making a bigger investment here."

88 percent is the average plan participation rate among the top 10 companies, compared to 70% at other organizatons.


Principal's Top 10 for 2011 And the winners are ...

* Associates for International Research, Inc., Cambridge, Mass.

Judges say: "The retirement plan is incredibly generous. ... they have almost 100% participation in their plan, which is very unusual."

* Consolidated Federal Credit Union, Portland, Ore.

Judges say: "They look after the complete health and financial security of individuals."

* Educational Commission for Foreign Medical Graduates, Philadelphia, Pa.

Judges say: "They are providing a very well-rounded, competitive benefit package."

* Greeley and Hansen, Chicago, Ill.

Judges say: "They have a strong 401(k) as well as a profit-sharing plan."

* Home Builders Institute, Washington, DC

Judges say: "From starting point to end point, they do an absolutely comprehensive job providing people with health and financial security."

* Postal Credit Union, Woodbury, Minn.

Judges say: "They have a person on staff who helps people with their financial planning, which I think is an emerging benefit you're going to see at more and more companies."

* RED F Marketing, Charlotte, N.C.

Judges say: "After five years and then again after 10 years they have this anniversary trip that the company helps support in a very substantial way. Great way to say 'thank you' to people and a meaningful financial benefit."

* Veridian Credit Union, Waterloo, Iowa

Judges say: "Their commitment to retirement security is excellent. You have an outstanding program."

* Water Environment Federation, Alexandria, Va.

Judges say: " ... an oustanding 401(k) match as well as a non-matching contribution. They also pay for a broker to come in and work one-on-one with employees."

* Western National Mutual Insurance Company, Edina, Minn.

Judges say: "One of the neat things they do is offer an emergency, $1,500, no-interest loan for any employee that has any type of a financial emergency."

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