At Draper Laboratory, Allen Hymovitz, the senior manager of benefits and quality of life, takes both facets of his title seriously. Retirement is not just about financial planning, he says. It's about planning for an extended vacation.

Draper's retirement preparation program is unique in that its benefits team offers significant accessibility and availability to the employees. Rather than give safe and generic answers to employees' retirement questions, Hymovitz and his team listen to workers and counsel them.

The strategy appears to be working, as Draper workers not only are appreciative of the rich retirement plan, but also for the personal touch that Hymovitz's group provides. It's going that extra step - at a time when many financially strapped employees need it most - that earned Hymovitz EBN's 2011 Benny Award for Benefits Leadership in Retirement Planning.

Draper, headquartered in Cambridge, Mass., has a 5% turnover rate as people get to the five year mark of employment, but even among those that leave, many come back, including retirees, as per diem employees.

"We never lose people at our company because they don't value our benefits," Hymovitz says.

Draper insists its exempt workers, 70% of all employees, defer 5% of salary into a defined contribution plan. The company matches the amount by 10%. Workers also have access to a supplemental retirement account and are given five years or until age 30 to join; after that they are automatically enrolled. Further, they are 50% vested on their first day of participation.

The remaining 30% of employees are automatically enrolled in a defined benefit plan after one year of service and receive 10% of their salary as a Draper contribution. They are not required to contribute to this plan but can participate in the supplemental retirement plan.

Employees have overwhelmingly taken advantage of the match: 99.6% of the engineers and salaried administrative staff have enrolled in the DC plan. Further, 60% of salaried employees contribute to the supplemental retirement plan on top of the staff member plan, and 62% of hourly employees participate in this plan.

The biggest challenge, according to Hymovitz, is the diverse population in age and position. Draper's average employee is age 47, but people range from age 20 to 86.

Emphasizing that "you need to design your plans so they work for everyone," Hymovitz says in 2010, Draper added a supplemental plan with a Roth 403(b) feature along with the traditional option, though employees can do both. The Roth aspect made sense for the younger population.

Appreciation is strong for this addition, "especially among the younger folks; because of the longer time horizon, the after-tax accumulation could work out much to their benefit," says William Redmond Jr., senior benefits administrator at Draper Laboratory.

When communicating about the retirement plan, "we spend a lot of time with our people, trying to be creative and come up with issues and solutions that many financial planners wouldn't cover," Hymovitz says."

In the education program, Draper provides twice-monthly, free, one-on-one onsite meetings with a TIAA-CREF representative. The retirement vendor also comes in periodically for group presentations on new topics or to remind plan participants to rebalance their accounts annually. In these meetings, reps make sure younger workers are beginning to save and older participants have saved enough.

About 70% of mass communication is done by TIAA-CREF and 30% by Draper benefits staff. Draper benefits staff is available for on-demand one-on-one counseling, so they can provide immediate responses. Hymovitz's team also supports employees getting their own financial planner, but suggests they still use Draper's resources.

"We're giving you a second opinion for retirement planning that you can totally ignore, but it will at least validate what you're hearing from this retirement planner that you're paying for," Hymovitz says.

The education campaign also includes guest speakers from financial institutions and other financial planning resources to present topics such as estate planning, will preparation, details on 529 plans and college-saving programs-making sure to tailor each approach to the individual.

"Draper has a lot of engineers who are looking for precise answers and data, so they can go back and plot out their own plan," explains Redmond. They listen to their questions and "give them the data about their benefits without guiding them in any one particular direction."

The financial angle is the easiest part of retirement, says Hymovitz; planning your time is more difficult.

"Think about when you take your family on vacation - how much planning and booking is involved? Guess what? You're going to have 26 two-week vacations a year. So, we spend a lot of time with our preretirees on managing their time as they start this new 'career,'" he explains.


Blending benefits with bananas

"We have a blend between financial programs, wellness programs and fitness programs," Hymovitz says. "We think smiling and laughter are healthy daily activities," so the company offers laughing yoga, and celebrates National Banana Day and Cookie Monster's birthday. The small perks work well, he says, and make employees more appreciative of the diversity of their programs.

"What people get from my team is more encompassing than what they typically get from retirement planners: their emphasis is saving for retirement; our emphasis is on saving. There are a few things that happen during an employee's life cycle before they retire: they might get married, have a child, buy a house, pay for education. We try to get our new employees to begin saving a small amount and, as they progress in their careers, to increase their savings accordingly," he says.

Employees get more than just fund options, they get support and a personalized touch, Hymovitz says. "The focus when preparing for retirement should go beyond the financial aspects," he says. "We help them prepare for a rewarding retirement. [It's like] starting a new career and [learning] how to prepare for it."

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