Companies that have the best 401(k) plans may follow similar lines of thought while trying to help their employees, but, by necessity, they use different approaches.
At this month’s Benefits Forum & Expo, Luke Vandermillen, vice president of worksite solutions for the Principal Financial Group, led a panel discussion on what the best retirement plan designers do differently. Represented were three of the 10 companies top-ranked by Principal for employee financial security – those, as Vandermillen said, “who go above and beyond in terms of taking care of their employees through their benefit plan.”
Pamela Peterson, human resources director for Alabama-based Davidson Technologies, says that, as with any benefit, the ultimate goal of good retirement plans should be retention of workers most capable of meeting customer needs. A good 401(k), she said, is the ultimate long-term return on investment.
“Our main objective is to recruit and retain as many highly skilled employees as we can,” Peterson said.
Vandermillen agreed, noting that the firms that made Principal’s list “have a turnover rate that is less than half the national average.”
“You can’t afford to let 20 years of experience walk out the door, regardless of your industry,” he said. Of course, the panel noted, top employees demand more; Peterson’s tech firm is loaded with Ph.Ds. and experts in their field who not only insist on blue-chip treatment, but might bristle at education efforts.
“The downside of having really educated employees is they think they know everything,” Peterson said drily. Nevertheless, everyone concurred, education is absolutely critical.
“What the best companies, in our view, have done is they’ve taken that education and they’ve made it more personal and more holistic,” Vandermillen said. “Because it’s not just ‘here’s my 401(k),’ it’s debt management, it’s college education, it’s home equity … it’s the whole enchilada.”
Garry A. Markle, COO of the Spiratex Company out of Michigan, said that talking to manufacturing workers about retirement savings is a particular challenge, both for practical and demographic reasons.
“A lot of them are younger; they don’t really think about retirement,” Markle said, drawing attention and giving thanks, as did both of his fellow panelists, to auto-enrollment programs and independent advisers. Whether it’s “piles being built or holes being dug,” Markle said, it’s Spiratex’s job to provide healthy options and information and get out of the way.
“Everybody’s idea of what’s important is different,” Markle said. Where Peterson’s workforce might think it knows all there is to know about finance, an assembly line employee might see a 401(k) as a way to “get a new Hummer right away,” he noted.
Spiratex has a different education challenge: its 24-hour production schedule.
“If you try to [hold sessions] at 8 o’clock after the midnight shift gets off at 7,” you’re doomed to failure. The round-the-clock schedule also makes it difficult to involve spouses and families in the retirement education efforts.
Karen Roch, a senior vice president at Arizona’s Credit Union West, also needs flexible providers and service structures to accommodate her firm’s dozen locations, but, she said, CUW’s small workforce of less than 200 was an even bigger impediment.
“There were so many obstacles because of our size,” Roch said “The big insurance companies didn’t want to play with someone with 150 participants. It really made it hard.”
One of the things all of the panelists said they do differently is to integrate health care, retirement and other benefits. For Roch, that means wellness.
“We completely changed our entire health plans to focus on wellness, and our last phase has really tied in with retirement plans,” she said. “We have initiatives … we actually have employees earn HSA dollars from those initiatives, and we’ve tied that into our retirement as well.”
Roch said CUW’s participation rate is more than 90%, but there were mistakes along the way. She urged benefits managers and HR reps to measure twice and cut once when it comes to designing plans.
“Utilize your resources … do your research upfront,” Roch said. She advised learning from the mistakes and successes of others and doing comparisons with companies “not necessarily your industry, but the same size.”
Register or login for access to this item and much more
All Employee Benefit News becomes archived within a week of it being published
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access