Durham, N.C.- For executives at Qualex Inc., a subsidiary of Eastman Kodak Co., running eye-catching education campaigns for its 401(k) plan participants is an ongoing activity.
The stream of contests and education pushes began last summer with a "Who wants to be a 401(k) millionaire?" theme, which borrowed liberally from the popular television game show. The goal of the campaign that featured four weeks of "millionaire" trivia contests hyping the $160 million plan, was to increase participation, said Mike Kelly, senior director of corporate benefits for Qualex.
In January, officials at Qualex increased the company match and made other changes allowing the plan to qualify for the 404(c) federal safe harbor program, Mr. Kelly said. They also added 12 new investment options, all mutual funds, replacing the previous six choices. They hired Strong Retirement Plan Services, Menomonee Falls, Wis., as unbundled provider, replacing The Northern Trust Co.
The education campaign began by sending participants teaser postcards that looked like the envelopes in which film is dropped off for photo developing, Mr. Kelly explained. On the postcards are tidbits of information about the 401(k) plan. For example, the "special instructions" section of one "envelope" stated: "We're developing a better Qualex 401(k) plan."
"The campaign was a real hit," Mr. Kelly said.
But Qualex executives didn't stop there. They just completed a campaign patterned after the "Survivor" television show, Mr. Kelly explained. As part of the "Be a 401(k) Survivor" campaign, employees received a video to help them learn how to diversify their 401(k) investments. Before the overall campaign started last year, Qualex participants were heavily invested in stable value investment options, Mr. Kelly said. Company officials wanted more diversification.
Everyone who watched the video could enter a drawing for a prize, a knit beach bag containing a Frisbee, water bottle and bottle opener, he said.
"It was fun. Everybody watched the video," Mr. Kelly said.
So far, the education blitzes have worked. In a recent employee survey, the popularity of Qualex's 401(k) plan increased by a magnitude of 10, he said. Moreover, participation went from about 54% to 75%. The average deferral rate went up to a bit more than 5% from just less than 4%, Mr. Kelly said.
"It's a safe harbor plan, so participants are getting 100% vesting, immediately," he said. "It's a real sweet deal."
What's next? Qualex's next campaign will be tied to April Fools' Day, which coincides with employee reviews and raises. That campaign will urge employees to wait a bit, instead of spending their money now. The point will be made with candy - the campaign will start with all employees getting a Hershey's PayDay bar. If they wait a week before eating it, they will get another candy bar: a Nestle 100 Grand Bar.
That campaign will be followed with an ongoing series of myth-debunking fliers and letters to be mailed to employees. The next myth the series will tackle is that a participants aren't hurt by taking loans from their 401(k), Mr. Kelly said. A video on the issue will be developed later this year, he said.
And the executives are working on a campaign targeted to non-participants and employees who defer too little money into the plan, Mr. Kelly said.
"We're always looking for things that are fun and educational," Mr. Kelly said. "One of our corporate philosophies is `to enrich the human spirit,' and these campaigns fit in with that."