401k Plan Automatic Enrollment Gets Results at this Large Employer
401k Plan Automatic Enrollment has made a significant difference for this 3,000-employee firm by substantially improving participation rates.
At the end of a Plan Sponsor University (TPSU) Program, Fred Barstein, Founder and CEO of The Plan Sponsor University (TPSU) interviewed Holly, Senior Benefits Specialist who has primary responsibility for the 401k Plan. Holly discussed the progress made in the company retirement plan by implementing just a couple of the ideas she heard discussed at a previous TPSU program. Small changes, with little cost, can have a dramatic impact on a Plan Sponsor’s Benefit structure – while also positioning the workforce to successfully retire at their normal retirement age.
Full Transcript Below
Fred Barstein with 401k TV. I’m here with Holly at the conclusion of our TPSU Program at UC Irvine. Welcome Holly. Okay if we ask you a few questions?
Thank you. Before we do, why don’t you tell our audience a little bit about yourself and what you do in your organization.
My name is Holly, I work for a company with about 3,000 employees. I’m a Senior Benefit Specialist there, my primary focus is the 401k.
Very good. One of the things we’d love to hear, you came a couple of years ago and you made some changes and seems to be working. What were those things that you learned and you implemented?
Yeah, I attended in 2016. Since then, we implemented auto enrollment, auto escalation. We implemented a match this year of 16% of the six. We changed our vesting schedule and we moved to B Transparency.
We also changed our eligibility to a two month rule to a six month rule do to our turnover.
You had a dramatic increase in participation, what did it to? From?
Mm-hmm (affirmative). In 2016, we were at about a 17% participation rate.
17%. We’re now at 85.
That’s wonderful. Now, a lot of this would be very difficult unless you had engaged and supportive senior management.
What is senior management engaged and supportive of this?
That well, we actually have a new management team. Me coming to this TPSU Program was the perfect time. We had a new management, the whole new management staff, and their main focus was growing a winning culture. With that, they wanted to focus on the employees and give back to the employees.
It kind of paired perfectly with improving our 401k Plan with their winning culture model.
It doesn’t hurt that there’s really historically low unemployment rates and getting really good quality, it’s not the easiest thing in the world, right?
So that’s very far sighted senior management, congratulations on that.
Now, what are you going to go back and recommend?
We’re going to probably go back and do an RFP on our record keeper.
Right. Do that, do you just want to check the prices?
Yeah. Just want to make sure that we’re in line with the industry and making sure we’re getting the best value.
It doesn’t mean you’re unhappy, right?
No. No, we’re definitely not happy but just wanting to make sure.
Do your due diligence.
Well great. Thanks for your time today.
Thank you for watching 401k TV.
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