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Successful 401k Plans Come in Many Shapes and Sizes.

Successful 401k Plans Come in Many Shapes and Sizes

Successful 401k plans come in many shapes and sizes. Factors that can contribute to the success of a 401k plan come from a variety of sources. At the conclusion of a Fiduciary Education Session, conducted at Virginia Tech, Mr. Fred Barstein, Founder and CEO of The Plan Sponsor University (TPSU), visited with Ms. Colleen Dyson, Senior Human Resources Generalist at her organization.  She oversees the retirement plan at the company which employs 200 individuals.  The plan has a participation rate of 98% which is a success story of its own. A surprising fact surrounding that participation rates is the average age of the workforce is approximately 40 years old. So, the question becomes – How do they do it?  How does a firm with an average age of 40 achieve a 98% participation rate and have such a successful 401k plan?  The video describes some of the procedures and steps for achieving their success metrics. This includes a strong message from the CEO concerning the importance of saving for retirement and delivering a regular and consistent message.  Learn how a strong leadership team with good communication skills and a quality retirement plan can make for a successful 401k plan.

Full Transcript Here

Fred Barstein:
Fred Barstein with TPSU and 401kTV. We just completed a program here in Arlington, Virginia, and I am here with Colleen. Welcome, Colleen.

Colleen:
Thank you.

Fred Barstein:
Okay if we ask you a few questions?

Colleen:
Yes.

Fred Barstein:
Thank you. Before we do, a little bit about your role at the company and how many employees you have?

Colleen:
Sure. I’m a Senior HR Generalist, so I touch in many different areas. We’re about 200 employees, and we operate in this area.

Fred Barstein:
Great, and you had your whole team here I thought?

Colleen:
We, pretty much. Yes.

Fred Barstein:
Very good. Congratulations.

Fred Barstein:
One of the things you talked about, which probably shows while your whole team is here, is your CEO goes to the quarterly enrollment meetings. Why does he do that?

Colleen:
Our owners really endorse saving early and starting early. After three months of hire, our employees are eligible, so our president likes to come out and just give a speech about how important it is to start early, and I think it’s been highly effective. We have a 98% participation rate in our 401(k) plan.

Fred Barstein:
98%. And you said you also have a younger workforce, right?

Colleen:
Yes, so our average age is 40. So again, people coming fresh out of college who might not know what a 401(k) plan is, really educating them on that, and how important it is to save.

Fred Barstein:
So, what does he say? What does he talk about? Just the importance of saving?

Colleen:
He talks about the plan. We have a very strong match. It’s about a 5% match, and he just kind of gives the benefits of it and some success stories of people who’ve been able to retire at our company by just investing and saving.

Fred Barstein:
Very good. And I know you have high participation, but any other effect you see by having the president come?

Colleen:
I think just high engagement in the sessions, and people just wanting to know more and learning more. We also offer one-on-one sessions with advisors.

Fred Barstein:
Right.

Colleen:
At no charge to the employee so they can really just understand each option available to them and diversify accordingly.

Fred Barstein:
I think it also shows that the company values and has the importance of the 401(k) to the … And I think that really comes through, and just 15 minutes every quarter.

Colleen:
Right.

Fred Barstein:
That’s all it takes.

Colleen:
Yep.

Fred Barstein:
That’s great. Final question. A couple of things you learned you may want to take back?

Colleen:
Yeah. In addition to our 401(k) educational sessions, we just offer them to our new employees, but a lot of people talked about opening it up to all employees.

Fred Barstein:
Yeah, sure.

Colleen:
Just to continue … We do an auto enroll, and an auto escalate up to 8%, but just to make sure people are investing regularly and checking on their account not really just setting and forgetting it, so we think that’s important. It was just a great session overall. I think there’s a lot of takeaways. I think we have a very strong plan, but we look forward to next year.

Fred Barstein:
Great. Well, thank you. Thanks for coming to TPSU and spending time on 401kTV.

Colleen:
Yes. Thank you for having me.

Fred Barstein:
Thank you for watching 401kTV. Stay tuned.

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