7 bold, creative defined contribution execs lauded in second annual Innovator Awards

The seven Innovator Awards winners used ancient traditions and modern technology — sometimes concurrently — to enhance retirement education, raise participation rates and account balances, and restructure DC plans to be simpler yet more effective.

The winners — along with eight plan executives named as finalists and given Awards of Excellence — were announced and feted at Pensions & Investments' West Coast Defined Contribution Conference, held Oct. 27-29 in San Francisco.

The awards are co-sponsored by P&I and the Defined Contribution Institutional Investment Association.

The second annual Innovator Awards recognized plan executives who took bold and creative steps to improve participants' outlook for retirement.

Stories on each of the winners begin on page 15. Video interviews can be found at pionline.com/Innovators13.

The winners are:

• Angela Buk, head of risk management and operations, Chrysler Group LLC, Auburn Hills, Mich., for outcome orientation;
• Sophie Dmuchowski, deputy director, office of communications and education, Federal Retirement Thrift Investment Board, Washington, lifetime income disclosure;
• Britt Huber, vice president for human resources at Kiva Microfunds Inc., San Francisco, technology and behavioral finance;
• Lois Osorno, director of human resources for Aloha Petroleum Ltd., Honolulu, education and communication;
• Chad Ryan, the Somers, N.Y.-based director of retirement plans at PepsiCo Inc., addressing plan leakage;
• Philip White, director of Racker Rewards at Rackspace Hosting Inc., San Antonio, Texas, financial wellness; and
• David Zellner, chief investment officer of the General Board of Pension and Health Benefits of the United Methodist Church, Glenview, Ill., for distribution planning.

“In reading through the diverse approaches taken by our innovators, it became clear that innovation isn't just coming up with the "next big thing,'” said Lew Minsky, executive director of DCIIA, who is based in Jupiter, Fla. “Instead, it's about being willing to take the often tireless, and sometimes risky, steps and strides of change.”

Nancy K. Webman, P&I's Chicago-based editor, agreed. She added: “To me, it didn't always matter how major the innovation was. What mattered to me was that all 15 finalists were bold, taking less-traveled paths as it were in order to get their participants to a better place when they retire.”

In an industry where change can be slow-moving, Chrysler moved quickly in a big way. Ms. Buk supervised the extensive redesign of a plan affecting some 55,000 participants. Under her guidance, all participants were re-enrolled, a rare occurrence among giant plans; the investment menu was streamlined; and Chrysler added a custom target-date series. Judges praised Ms. Buk's effort as illustrating that many changes could be achieved for many participants — a lesson for other DC plans.

Ms. Dmuchowski led a team that developed an illustration of a monthly income stream for participants, placing the large-type information at the front of the annual statement to participants. “Presenting a projection of a participant's monthly income is a notable and important task,” one judge wrote.

Ms. Huber used iPads and Internet-based software to engage Kiva's computer-literate employees in assessing their retirement readiness and making improvements. “For a smaller plan, this was an institutional plan effort which translated to great success in terms of employee participation and engagement,” noted one judge.

Ms. Osorno created a program that takes into account many cultural, economic and educational differences among employees using a Hawaiian tradition of "talk story' — informal get-togethers — to discuss retirement planning. To reach employees working on several islands, she used Skype to conduct financial education meetings. “Rather than creating a one-size-fits-all campaign, they thought outside of the box by looking at employee education in a new way,” said one judge.

Mr. Ryan directed changes that reduced the number of outstanding loans allowed in PepsiCo's 401(k) plans and provided employees with a cash-and-debt education program. “The program that they put together seems not only innovative, but transformational,” a judge remarked. “Their materials were not only well written but well thought-out, extremely detailed and, most importantly, helpful.”

Mr. White helped create RackWealth, which offers education, guidance and financial calculators to create a unified financial wellness message. “While financial wellness is not a new idea, Rackspace developed it with a broad reach and measurable goals,” wrote one judge.

Mr. Zellner was honored for designing a system that allows participants to determine if their goals for monthly income payments in retirement are supported by factors such as their account balance, age and asset allocation. “It was nicely tailored to participants to help them with their individual needs and circumstances,” one judge wrote. “It was a great solution.”

Eight executives received Awards of Excellence.

David Beik, vice president for operations at Verizon Investment Management Corp., a unit of Verizon Communications Inc., Basking Ridge, N.J., expanded the use of alternatives in Verizon's custom target-date funds. These alternatives included commodities, infrastructure, global equity, global high-yield bonds and active currency.

Lisa Blasdale, senior benefits manager, Staples Inc., Framingham, Mass., used a game-show format to educate participants about retirement savings.

A meeting, aimed primarily at first-generation Americans less familiar with retirement accounts, included a master of ceremonies asking Staples employees about their experiences with retirement planning. For the game show, modeled after “Family Feud,” employee teams were asked questions about retirement topics discussed earlier in the meeting.

Tim Berry, former Indiana state auditor in Indianapolis, added auto enrollment and auto escalation to the Indiana Deferred Compensation Plans, known as Hoosier S.T.A.R.T.

Mr. Berry, who oversaw the plans, expanded the custom-target date portfolios to include alternatives such as unconstrained bonds and an absolute-return fund.

Tom Gonnella, executive vice president, Lincoln Trust Co., Denver, restructured his company's plan to achieve greater results through greater simplicity. Lincoln's Smart Plan eliminates core options. Instead, it defaults participants into low-cost, risk-based models that are professionally managed.

Mr. Gonnella changed the strategy in part because he found 25% of participants either had no equities or 100% equities in their accounts.

Helene Sanford, the Palm Bay, Fla.-based director of human resources and compensation for Intersil Corp., coordinated a revamping of the company's 401(k) plan that included expanding its financial wellness program.

The Intersil program features a health-cost calculator, giving participants a broader picture of their future beyond salary and retirement savings.

Michele Talka, senior director, HR operations, H. Lee Moffitt Cancer & Research Institute, Tampa, Fla., restructured two defined contribution plans by changing auto-enrollment and auto-escalation features, revising the vesting schedules and changing the employer-match formula to reward greater participation.

Thomas Woodruff, director of the healthcare policy and benefit services division in the Connecticut comptroller's office, Hartford, sought to simplify participants' investment choices in the state's three defined contribution plans.

Mr. Woodruff helped establish eight custom-risk portfolios ranging from ultraconservative to ultra-aggressive.

Gina Zoetvelt, former senior benefits manager, Motorola Solutions Inc., Schaumburg, Ill., continued her company's focus on getting workers who are nearing retirement to take advantage of managed accounts.

As participants turn 60, Motorola automatically enrolls them in a program that contains investment advice, a managed account and a mechanism for providing monthly payments upon retirement. Participants may opt out.