P&I spotlights 5 who went extra mile for participants

2014's five Innovator Award winners all sought to engage specific groups of participants who haven't taken full advantage of retirement savings programs or who have been underserved by their defined contribution plan.

The winners are:

• Rosemary Vilgan, CEO, QSuper, Brisbane, Australia;


• Steven Grossman, Massachusetts state treasurer and receiver general, Boston;


• Carol Sung, 401(k) product manager, International Paper Co., Stamford, Conn.;


• Jeannie Lowe, vice president, human resources, Buck Consultants, San Francisco; and


• Georgette Gestely, director of the New York City Employee Benefits Program, Office of Labor Relations.

Using techniques that range from the technological to the conversational, the award winners — plus eight finalists who were given Awards of Excellence — were honored at Pensions & Investments' West Coast Defined Contribution Conference, held Oct. 26-28 in San Diego.

The awards are co-sponsored by P&I and the Defined Contribution Institutional Investment Association. They recognize plan executives who have taken unusual, bold and creative steps to help improve participants' income at retirement.

“Picking the winners and finalists is so difficult, in part because the nominees take such different approaches and yet all are successful. One might use annuities in the investment lineup; another might deliberately eschew annuities and go a different route,” said Nancy K. Webman, P&I's editor.

Added Lew Minsky, executive director of DCIIA: “The work of innovation in the plan sponsor community is so important. There is so much potential in the current retirement savings system, but maximizing this potential and closing the retirement security gap depends, in large part, on sponsors that are focused on improving retirement outcomes and are willing to innovate.”

Innovator Ms. Vilgan advocated a greater sensitivity to participants' needs, leading the staff at the A$48 billion (US$41.8 billion) superannuation fund to create a default investment option that takes into account eight different groups — or cohorts — of investors. It offers more flexibility than a default investment of a single balanced fund, and Ms. Vilgan says it could be refined to incorporate retirement age, gender and salary.

“I think what she did was a great idea to ensure that public employees have adequate retirement funds,” one judge said.

Recognizing that most small non-profit organizations lack retirement savings plans, Mr. Grossman led the effort in Massachusetts to create a 401(k) program for them. Building on a bill proposed by Mr. Grossman's office that became law in 2012, the treasurer's office is in the final stages of getting approval from the Internal Revenue Service. The goal is to create a group trust in which assets of employees from non-profits will be pooled with the assets of the $7.1 billion Massachusetts Deferred Compensation Plan, giving them economies of scale.

“It feels like the Massachusetts Treasury is filling a need for their community,” one judge wrote.

Believing that employees must be more involved in the management of their retirement accounts, Ms. Lowe is administering a new program at the $150.7 million 401(k) plan that identifies a person's retirement needs based on age, salary, retirement account balance, Social Security and outside savings. The program also creates a customized retirement goal and a recommended contribution strategy.

“Buck seems to have a dynamic solution that takes into account the full retirement savings lifecycle,” an Innovator judge commented.

At International Paper, Ms. Sung began administering a new program that had two goals — encouraging older employees to remain in the $5.1 billion 401(k) plan and enabling these employees to create a retirement account that offers a steady stream of payments in retirement. She didn't want an embedded annuity, so she implemented a managed account program with a drawdown component for employees 55 and older.

“I was impressed with how they communicated the reasons behind why an employee should consider leaving their 401(k) balance within the International Paper 401(k) plan vs. rolling it over,” one judge said.

Ms. Gestely, meanwhile, had research showing women are significantly underrepresented in contributions, so she looked for ways to encourage greater participation. One idea became the women's round table, a gathering of women who discuss retirement issues as well as a host of other financial, health and work-life issues. It is part of a more extensive women and financial security program the $15 billiondeferred compensation plan offers.

“It addressed a need within the plan (and was) research-based, both in terms of identifying much lower participation among women in the plan, and in terms of learning styles that would be most effective and best received among a female audience,” one judge said.

Eight executives received Awards of Excellence:

• Brant Suddath, director of benefits, The Home Depot Inc., Atlanta, developed with Aon Hewitt “Rollover Month,” a campaign to encourage workers to roll over 401(k) accounts from other employers and individual retirement accounts into the Home Depot plan. The goal was to help participants better manage their retirement savings and to benefit from lower fees than they could get on their own.


• Hugh Penney, senior director, compensation and benefits, Yale University, New Haven, Conn., worked with TIAA-CREF to develop a financial education program designed to address what his nomination form called “the complexities and nuances” for the lesbian, gay, bisexual, transgender and queer community.


• Kari Steen, group manager, financial well-being, Target Corp., Minneapolis, in conjunction with Financial Finesse Inc., developed a program that incorporates financial and medical wellness in strategies aimed at specific groups such as retail employees, young employees, part-timers and corporate employees. The program includes one-on-one meetings with a financial planner and ongoing financial counseling. Much of the program is available in Spanish. Measurements of success include reducing loans and hardship withdrawals from the 401(k) plan, increasing retirement plan participation and deferral rates, and expanding employee use of benefits such as life insurance and disability insurance.


• Sonja Kellen, director of global retirement benefits, Microsoft Corp., Redmond, Wash., with the assistance of Towers Watson & Co. and Financial Engines Inc., developed two interactive online financial planning tools. The tools enable employees to enter assorted financial information to create models on how various factors would affect their savings behavior. The tools allow participants in the plan to set goals and then remind them if they aren't meeting those goals.


• Steven Montagna, plan manager, City of Los Angeles Deferred Compensation Plan, developed two customized online tools that help participants adjust variables to help them prepare a retirement strategy unique to their needs and circumstances. They were prepared with the cooperation of officials at the three defined benefit plans to which deferred compensation plan participants belong. “We didn't invent the complexity,” said the plan's Innovator Award application, “but we have to do our best to interpret it.”


• Ron Virtue, director of investments, JM Family Enterprises Inc., Deerfield Beach, Fla., was honored for using alternative investments in a bundled package, rather than stand-alone investments. The goal, Mr. Virtue said, is “meaningful returns with a moderate amount of risk in multiple types of economic environments no matter the sophistication level of our participants.”


• Pete Apor, director of retirement services, Fujitsu Management Services of America Inc., Sunnyvale, Calif., supervised the auto enrollment of certain employees 50 and older who weren't taking advantage of 401(k) catch-up contributions. Mr. Apor decided against the traditional opt-in approach, using opt-out instead. Some 86% of the targeted employees made catch-up contributions.


• Tammy Jurinsky, the Maryville, Tenn.-based senior manager, North America benefits, DENSO International America Inc., launched a “retiree income portfolio” that has an accumulation phase through a glidepath that reduces risk as someone approaches 65, and a retirement phase designed to produce income in retirement. DENSO uses this approach to encourage participants to stay in theplan after retirement.