FLORENCE, S.C. - McLeod Regional Medical Center of the Pee Dee has an evolving benefits program.
Recently, Florence-based McLeod crowned an extensive education and communications campaign by adding online investment advice provided by Morningstar Associates LLC for participants in its $100 million defined contribution plans, said Timothy Hess, director of compensation and benefits.
In January, Chicago-based Morningstar began providing its advice and guidance service, ClearFuture, by way of its alliance with INVESCO Retirement Inc., Atlanta, McLeod's semibundled service provider
"We did it in response to a lot of people who wanted to know more," Mr. Hess said. "We tested it for about a month until we were comfortable that it's doing what it should do."
Participants pay outright for the service, Mr. Hess said. "Legally, we were advised to keep it at arm's length."
The advice service is part of a revamp of McLeod's retirement benefits package. Previously, McLeod offered a money purchase plan, but found itself competing for talent with other health-care providers that had 401(k)s, Mr. Hess explained. Officials surveyed employees and found many did not even know they had a money purchase plan.
So, last year, McLeod rolled out an $82 million 401(k) plan for the entire company with 10 investment options, an automatic enrollment feature, and a money purchase component, Mr. Hess said. (McLeod had a small 401(k) for its for-profit division since 1997.)
The plan has two investment tiers: core fund options participants can mix and match on their own and a set of three lifestyle funds.
The core funds are the MFS Value Fund A, IRT Stable Value Fund, PIMCO Total Return Fund, IRT Core Balanced Fund, American Century Income & Growth Fund, IRT 500 Index Fund, INVESCO Growth Fund, INVESCO Dynamics Fund, Janus Worldwide and Putnam International Growth Fund.
Next, McLeod launched an education blitz and upgraded the look of its communication materials. McLeod developed a rainbow logo and tied the materials to the logo using a crayon theme, Mr. Hess said. The theme is "It's Waiting for You."
"It's a double entendre that retirement's waiting for you and the plans are waiting for you," Mr. Hess said.
Other retirement education materials took on the same look and similar themes. The topic of diversification was introduced with a pamphlet that began: " A colorful retirement may require a rainbow of investments."
The light theme had serious goals, including boosting participation. Prior to the conversion, participation was about 57%; after the changes, participation rose to about 97%.
The current education campaign is targeted at the participants Mr. Hess calls the "two percenters." Some 40% of employees were enrolled automatically, with about 1,429 employees, or 33%, staying at the 2% default deferral rate. Some 70% of the plan assets are in the default election, the core balanced fund.
All "two percenters" were invited to investment education meetings, and 325 attended. Of those, 23% changed their election following the meetings, Mr. Hess said.
Aon Consulting assisted.