P&I celebrates DC innovators

A state-run program to give some private-sector employees a first chance at retirement savings, a massive overhaul of a university defined contribution program and an interactive retirement-strategy quiz designed to pique the interest of high-tech engineers were among the winners of the 2018 Excellence & Innovation Awards.

"It's truly amazing to see how far the plan sponsor community has come in the seven years that have passed since we started these awards," said Lew Minsky, president and CEO of the Defined Contribution Institutional Investment Association, whose organization collaborates with Pensions & Investments on the awards.

"Reviewing the nominations this year provided a unique window into what creative and innovative plan sponsors are doing to drive better outcomes for their participants," he said.

The nine winners were recognized for their work at the annual P&I West Coast Defined Contribution conference in San Diego on Oct. 22.

Added Pensions & Investments Editor Amy Resnick: "We hope focusing attention on the work that these winning plans and their executives do will inspire other plans and their leaders to explore what they can do to improve retirement preparations for their participants. We want to shine a light on the good ideas."

The innovation award winners are:

• Tobias Read, Oregon state treasurer, Salem.


• Marco Merz, director of defined contribution, and Arthur Guimaraes, chief operating officer, Office of the Chief Investment Officer, Board of Regents, University of California, Oakland.

The excellence award winners are:

• Mary Nell Billings, Memphis, Tenn.-based senior director, global retirement programs, Hilton Worldwide Holdings Inc.


• Kerstin Aiello, senior benefits manager, Synopsys Inc., San Francisco.


• Tricia Miyoshi, human resources manager, Package Pavement Co. Inc., Stormville, N.Y.


• Diana Winalski, Stamford, Conn.-based head of 401(k) product management, International Paper Co.


• Lisa Montalvo, benefits division leader and plan administrator, Lawrence Livermore National Laboratory, Livermore, Calif., and Michelle Ryan, investment program manager, Los Alamos National Laboratory, Los Alamos, N.M.

In July, Oregon became the first state to launch a state-based auto-IRA, called OregonSaves, helping workers contribute to a retirement savings program if their employers don't offer such an opportunity.

OregonSaves allows these workers to invest in a Roth individual retirement account. The program sets an automatic deferral of 5% of pay per year, plus an annual 1% automatic escalation until the total retirement contribution reaches 10% of pay. Employees can opt out.

"Clearly, this is a groundbreaking initiative," wrote one judge.

"In addition to developing an easy-to-administer program, the marketing and rollout was excellent," another judge wrote.

By mid-October, 1,275 employers had registered for the program, and participants had invested $8.3 million.

The University of California engineered a major overhaul of its three defined contribution plans — 403(b), 457(b) and 401(a) — leading to lower costs, a streamlined investment lineup and a white-label strategy that made investment choices easier to understand.

The cost-reduction of $6 million annually represented a 25% drop. The restructuring also featured the use of collective investment trusts in each plan. These options are common for most types of plans, but they are extremely rare in 403(b) plans.

"I gave high importance (to the university's effort) since this is helping to further the use of non-mutual funds in 403(b) plans," one judge wrote.

"There was significant improvement to their fund lineup — in terms of cost, structure and in communicating it to participants," another judge wrote.

Hilton made extensive use of detailed data from its record keeper, T. Rowe Price Group Inc., to get a better understanding of participants' needs and retirement savings practices, allowing the company to tailor its communications.

Hilton was able to analyze who wasn't saving, who was saving at rates below the company match and who was saving at or above the company match. The company also looked at different age groups' savings behavior.

"This is a comprehensive financial wellness program targeting a diverse group of employees," one judge wrote. "It is thoughtful."

Financial education sessions that provided information to employees of different ages and at different stages in their careers was the goal of Package Pavement. These sessions were mandatory because benefits officials believe these efforts help people better understand retirement savings and strategies. Employees had the opportunity to meet one-on-one with benefits officials to learn, for example, more details about the company match or how target-date funds work. The sessions also were conducted in Spanish because it is the primary language for 25% of the workforce.

"What impressed me was the ability to overcome logistical problems to get to all employees, and to make it more personalized by age and by overcoming language barriers," one judge wrote.

Synopsys decided to play a game with serious intent, creating an eight-question interactive quiz to encourage employees — many of whom are engineers — to better understand the mechanics and strategy of retirement savings. Among employees who took the quiz — some took it more than once to score 100% — Synopsys recorded an increase in asset allocation changes and an increase in deferrals compared to a pre-quiz reporting period. Although the quiz is part of the company website, Synopsys will offer it again next year with a new education campaign.

"Quizzes have been around, but this takes a fresh approach ... in that they made it fun, easy (and) digestible," wrote one judge, complimenting the results.

International Paper added a long bond investment option as well as a service from a third party to help participants review opportunities for purchasing annuities outside of its two 401(k) plans. The goal of the former, which could offer higher payouts, is part of the effort to keep participants in the plan; the latter is to give participants some comfort in choosing screened annuity providers.

"I love how this helps participants close to and at retirement, while also preserving assets in the plan to keep/further lower administrative costs for all," one judge wrote.

Lawrence Livermore National Laboratory and Los Alamos National Laboratory both used "financial fitness boot camps" to enhance participants' education not only about retirement savings but also about daily financial issues — such as debt management — that could affect their approach to saving for retirement.

The boot camps offered information targeted to different types of employees — early career, midcareer and late career. And both institutions will offer another boot camp next year.

The boot camps are "a very good initiative and could lead to favorable outcomes for their participants," one judge wrote.