Pensions & Investments 12th annual
Excellence & Innovation Awards
Stories by Robert Steyer, photography by Ciara Cusseaux

Meet the 2023 winners

The 12th annual Excellence and Innovation Awards honored the work of public sector plans, private sector plans — even a plan that didn’t exist until one state government acted. The awards were presented Oct. 24 in San Diego, Calif., during Pensions & Investments' Defined Contribution West Conference.

The awards ceremony — sponsored by P&I and the Defined Contribution Institutional Investment Association — cited efforts to provide a guaranteed income solution, to offer a retirement-plan lifeline to employees in small businesses and to provide a corporate match if employees paid off student debt and/or contributed more to their 401(k) accounts. Employers also were recognized for implementing plan design changes by making fees more transparent and equitable and by giving participants a chance to select an investment usually available only to defined benefit plan participants.

To learn about this year’s winners, click on their profiles listed here.

Excellence & Innovation Award Winners

Excellence & Innovation

Diana K. Winalski

Deputy CIO
International Paper

Although some defined contribution plans insert a real estate investment trust into target-date funds or balanced funds, Diana K. Winalski believes participants can better benefit from having a stand-alone real estate fund.

That’s why she led the charge to add a private real estate fund to the company’s two 401(k) plans — one for hourly employees, the other for salaried employees — collectively called the International Paper Savings Plan.

This addition, offered in February 2023, gives participants an investment opportunity that the defined benefit participants had enjoyed for many years, said Winalski, deputy chief investment officer at International Paper. The goal of the fund is to offer an attractive risk-adjusted return, investment diversification and potential inflation protection. It took about a year from initial study to the launch because retirement plan executives wanted to make sure certain requirements. “We had long desired to do this, but we didn’t see a vehicle that provided daily liquidity and a daily valuation,” said Winalski, until choosing the Prudential Retirement Real Estate Fund, a separate account that invests in commercial real estate properties and real estate investment trusts.

Winalski and the International Paper trust investments department didn’t want a stand-alone REITs fund because it correlated too much with a small-cap equity fund. Executives decided against adding to the DC plans the private real estate funds that are part of the company’s pension fund because they didn’t offer daily liquidity or daily valuations, she said.

The plans’ self-directed brokerage window offers REITs but not private real estate. The company doesn’t offer a target-date series. Instead it offers three risk-based funds — conservative, moderate and aggressive — which contain REITs and private real estate.

Company executives also wanted to make sure participants didn’t over-invest in the fund, placing a 25% limit on a participant’s account devoted to the fund.

For liquidity purposes, the Prudential real estate fund allocates 25% of assets to REITs.

At the moment, participants have invested $7 million in the real estate fund, 70% of which is part of the plans’ managed account service, she said. The two 401(k) plans have $6.1 billion in total assets. “It’s a bold move to put it in on the core lineup, but this initiative can further the discussion around alts in DC plans,” one judge wrote.

Adding such an investment option “is certainly not the norm, so I applaud them for going through all the steps and processes,” another judge wrote.

Several judges wondered how the cautious DC industry would react to adding a stand-alone product as opposed to traditional offerings incorporating real estate.

Winalski said she understands the industry’s concerns. “We hope sponsors will examine the benefits of private real estate,” she said.

―By Robert Steyer

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Excellence & Innovation

Josh Gotbaum

Board Chair
MarylandSaves

Like the handful of other state auto-IRA programs, the Maryland Small Business Retirement Savings Program, better known as MarylandSaves, is throwing a retirement-savings lifeline to employees in small businesses who don’t have their own retirement plans.

However, MarylandSaves has added some extra attractions to encourage businesses to join the program and to encourage employees to save even more, explained Josh Gotbaum, board chair of MarylandSaves.

On the employer side, MarylandSaves waives the $300 state annual report filing fee for joining the program, as an inducement for businesses to join, Gotbaum said.

“Business takeup rates in Maryland are comparable to the initial takeup rates in the first states that launched auto-IRA programs,” he said. “Those states relied on mandates and penalties rather than a sign-up incentive. We have heard from many business owners and business organizations that they view the fee waiver as being much more business-friendly than being subjected to fines or other noncompliance penalties.”

So far, 2,107 employers have registered and 4,582 employees are participating.

“This is a great job working to solve the coverage gap and to encourage employer contribution through incentives vs. penalties,” wrote one judge of the Excellence & Innovation Awards.

On the employee side, MarylandSaves mandates an emergency savings component in which the first $1,000 contributed by participants through payroll deductions goes into an emergency savings account. “We learned from other state programs that this is financial security 2.0,” Gotbaum said. “One reason for nonparticipation is employees ask, ‘How do I get the money out if my kid gets sick.’ We looked for a better way.”

The emergency savings fund is invested in a Lincoln Financial Stable Value Account, an annuity with a current guaranteed return of 2%, and a guaranteed minimum return of 1% for the life of the contract. Although employees are automatically enrolled, they can opt out. The initial contribution is 5% of pay, although participants can choose higher or lower rates. Default contributions will automatically escalate 1 percentage point annually to a maximum of 10%.

Aside from the emergency fund contribution, the rest of a participant’s money goes into a target-date fund. However, the participant can choose a few other investments.

“It doesn’t get more important than broadening access to retirement accounts,” another judge wrote. “I love the emergency savings fund feature.”

Future goals include a Social Security bridge feature, which will allow participants to delay claiming Social Security by taking distributions from their MarylandSaves account, leading to higher monthly Social Security benefits, Gotbaum said.

Also on the drawing board is a managed payout system, allowing participants to receive a monthly payment when they retire instead of receiving a lump-sum payment, he added. Both goals are a few years away from realization, Gotbaum said.

―By Robert Steyer

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Watch our interview with Josh

Excellence & Innovation

Savings Plus Team

Represented by Sarah Reeder
Savings Plus Program

With a desire to increase transparency about fees and make them more equitable among participants, Sarah Reeder and the investments, fiscal and operations team at Savings Plus implemented a fee-leveling program to achieve those goals.

“This was an opportunity to educate people on how fees affect investments,” said Reeder, deputy administrator of Savings Plus, which administers 401(k) and 457(b) plans for most California state employees.

The plans have $19.6 billion in assets and cover 245,000 participants and beneficiaries.

The new fee schedule was launched in April 2022. Savings Plus reduced the annualized asset-based fee to 0.04% from 0.05% , but raised the annual administrative charge across the board to $24 from $18. The changes were designed to produce an “equitable share of plan expenses” to participants, provide greater fee transparency, enhance fund performance and simplify plan communication and education, said the Savings Plus application to the Excellence & Innovation Awards program.

As a result, a majority of participants will pay less in fees, Reeder said.

According to hypothetical examples provided by Savings Plus, the annual fees for a participant with a balance of $100,000, will decline by $4 vs. the old fee system. For a $600,000 balance, the fees will fall by $54.

For people with the largest balances, the asset-based fee component is capped at $240 a year for the first $600,000 in an account. That means, for example, the total fees for an account of $800,000 will be $154 less than under the old system.

Fees will remain the same for someone with a $60,000 balance and will go up by $5 a year for someone with an account balance of $10,000, according to the hypothetical balances provided by Savings Plus.

Savings Plus also established a one-year fee waiver for new employees, a strategy designed to encourage enrollments, Reeder said.

“With the increased fee transparency, the goal was for the change to aid in conversations with participants looking to move their assets out of the plan,” she added. “The visibility of the asset-based fee provides another talking point for our representatives, but also for our participants to leverage with new providers, to help our participants with these questions when comparing Savings Plus to another plan.” Retirees can keep their assets in the plans.

Reeder and her team looked at peers’ practices regarding costs and transparency. “We were in the middle,” she said. “We could do better.”

Savings Plus acted after working with Callan as its plan design and provider search consultant; its record keeper, Nationwide Retirement Solutions; and its custodian, J.P. Morgan.

Communicating the changes required an extensive education campaign. Among the efforts were a quarterly newsletter; information to participants on where they could find the fee changes on the plan website; fee change notices sent via postcard and email prior to implementation; and emails to human resources officials and labor unions prior to the changes.

Savings Plus also published a list of 17 FAQs, ranging from the reason for the changes — a greater level of fee transparency, simplifying plan education and communication, and making fees equitable — to detailed discussions about amounts, timing and deduction practices.

Reeder said many of the FAQs were based on discussions with peers. “Many were on point for us, but we fine-tuned it,” she said.

As a result, she described participant feedback as “fairly neutral,” adding that there were some concerns that were addressed “when we walked people through the changes.”

The Saving Plus approach earned a rave review from one judge.

“I loved the way that the plan re-evaluated their fee structure piece by piece for improvements,” the judge wrote. “This case study could help lead the way for other plans to follow suit but be free to reach their own conclusions.”

―By Robert Steyer

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Watch our interview with Sarah

Excellence & Innovation

Cody Davis

Director of Benefits
CoStar Group

Even with a high retention rate among a young staff at CoStar Group, Cody Davis, director of benefits, wanted to make sure his company remained on the front lines of attracting and retaining employees. In January, CoStar launched a program that provides a corporate match to employees who contribute a portion of their salaries to paying off student debt and/or contributing to the sponsor’s $533.5 million 401(k) plan.

“We are interested in good habits for savings,” said Davis, whose employer provides online real estate marketplaces, information and analytics with brands such as Homes.com and Apartments.com. The maximum match is 4% to either contribution — or a combination, such as 2% for student debt payments and 2% for the 401(k). A 3% contribution leads to a 3% match.

Although CoStar has a younger demographic, the match system can help older employees, too, Davis said. The company’s monthly employee retention rate is 99% and the average tenure is five years, Davis said. The average employee age is 37.

“People have said this is a big win for them,” Davis said.

CoStar began working on this idea in 2021, choosing an arrangement with SoFi, a third-party administrator through which employees enroll. SoFi assists in verifying an employee’s student loan payment. SoFi also offers a student loan debt navigator tool to help employees evaluate repayment options.

CoStar and its record keeper, T. Rowe Price, are monitoring employees’ activities, and the record keeper has conducted an education campaign that includes email announcements, flyers and a webinar.

CoStar had looked at the program of Abbott Laboratories, in which the company contributes money to an employee’s 401(k) account if the employee pays a percentage of annual salary to retiring student debt. Davis said CoStar’s match approach doesn’t raise the cost of the company’s retirement program. A 4% match for an employee paying off a student loan is the same as a 4% match if the employee contributes to the 401(k) plan.

Also, CoStar previously hired SoFi to handle employee contributions to a 529 plan. “So, we had a relationship,” Davis said.

By mid-September, about 200 employees, or about 4% of the company, participated. Davis expects that rate to rise because the U.S. Department of Education’s COVID-19 relief for federal student loans has ended and payments restarted Oct. 1.

“This is a very innovative initiative and is very clearly focused on helping employees save more for retirement despite student debt,” wrote one judge of the Excellence & Innovation Awards. “Addressing student debt is an extremely important innovation,” another judge wrote. “I love the thought leadership here.”

―By Robert Steyer

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Watch our interview with Cody

Excellence & Innovation

Melissa Santostefano

Assistant Vice President
Lincoln Financial Group

It took more than three years of research, planning and execution, but the wait was worth it for a guaranteed income product for participants in two 401(k) plans and two money purchase plans at Lincoln Financial Group with combined assets of $3 billion.

That’s the assessment of Melissa Santostefano, assistant vice president for total rewards-retirement, describing an in-plan annuity option that took effect in December 2022. “We wanted to transform savings in retirement to living in retirement,” she said.

Part of the motivation was the fact that Lincoln had frozen two pension plans in 2008 to new employees and benefit accruals.

Another part was to give Lincoln’s 14,000 retirement plan participants as much flexibility as possible while addressing market risk and longevity risk.

The guaranteed income product is structured like a target-date series, but it is an annuity that is offered outside the Lincoln plans’ target-date series. The latter is a qualified default investment alternative; the guaranteed income option, which has attracted $5 million from participants so far — is not.

Participants can take a distribution from this option any time after reaching age 65 even if they are still working. The annual distribution is 5%, which can be taken on a monthly, quarterly, semi-annually or annually, she explained. The 5% rate is set by the provider, although it will be adjusted downward if the participant’s spouse is covered, Santostefano said.

If a participant outlives his or her guaranteed income account balance, payments will still be made because the product includes an insured annuity, she explained.

Lincoln chose Income America 5ForLife, a guaranteed income product from Income America, a collaboration of six companies: American Century Investments, SS&C Technologies, Nationwide Mutual Insurance Co., Wilmington Trust, Wilshire Advisors and Lincoln Financial Group.

Although Lincoln is a member, Santostefano said her company looked at other guaranteed income options.

“We utilized a scorecard that reviewed the available products in a variety of ways,” she explained. “High level topics included: participant features, product features, cost and participant experience.”

Lincoln decided against incorporating the product into its existing target-date series. Because participants have different retirement needs and circumstances, some may not need or want this option, Santostefano said. “As a fiduciary, we wanted to give participants a choice. One size doesn’t fit all.”

Judges praised the strategy and the choice offered to participants.

“I like the idea of offering lifetime income alongside and separate from the target-date funds,” one judge wrote.

“This is true innovation by adopting a guaranteed income option,” another judge wrote. “I know from experience how much work it is.”

―By Robert Steyer

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Watch our interview with Melissa

Meet the 2023 judges

The judges for the 2023 Excellence and Innovation Awards provided a diversity of perspective and experience in working with representatives of Pensions & Investments and the Defined Contribution Institutional Investment Association.

The external judges were:

  • Lisa Joe, director of retirement programs and services, Board of Regents, University System of Georgia.
  • Diane Chui Justen, director, plan administrator, City and County of San Francisco.
  • Michelle Kletz, vice president, defined contribution product manager, Goldman Sachs Asset Management.
  • Marla Kreindler, partner, Morgan Lewis & Bockius.
  • Jamie McAllister, senior vice president, defined contribution consulting practice, Callan.
  • Marco Merz, head of defined contribution, Office of the CIO of the Regents, University of California.
  • Lew Minsky, president and CEO, Defined Contribution Institutional Investment Association.
  • William Ryan, partner and head of defined contribution solutions, NEPC.
  • Karen Witham, vice president, communications and marketing, Defined Contribution Institutional Investment Association.
  • Megan Yost, senior vice president, engagement strategist, Segal Benz.

Judges from Pensions & Investments were Julie Tatge, executive editor, and Robert Steyer, reporter.

Honorable Mentions

Four individuals received an honorable mention in the Excellence & Innovation Awards.

  • Paul Farmer, talent and culture executive, global head of human resources, Halma Holdings, recognized for leading a multipronged effort to enhance its plan, including an increased match, accelerated vesting and reducing wait time to participate in the plan.
  • Kelly Hiers, defined contribution plans administrator, Virginia Retirement System, recognized for an auto-escalation drive targeting members of its hybrid retirement plan.
  • Jennifer Koelle, investment officer, public markets, Illinois State Board of Investment, recognized for implementation of automatic escalation of savings rates for all auto-enrolled participants beginning in January 2023.
  • Brian Rochford, senior manager, pension investments, Pfizer, recognized for detailed analysis of Pfizer’s single manager white-label funds, and moving to multimanager portfolios to enhance outcomes.

Excellence & Innovation Award Finalists

Four individuals and one team were named finalists in the Excellence & Innovation Awards. 

  • Robert J. Ball, chief investment officer, Joint Industry Board of the Electrical Industry.
  • Thak Bhola, manager, pension, benefits and administration, Goodyear Canada.
  • UPS Retirement Strategy and U.S. Benefits team, manager, pension, benefits and administration, Goodyear Canada.
  • Jennifer Mausolf, communication and retirement strategies director, Municipal Employees’ Retirement System of Michigan.
  • Mary Porter, human resources information systems manager and benefits administrator, Northern Arizona Healthcare.

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2023 Lillywhite Award

Daniel Houston

Principal Financial

Daniel Houston, chairman, CEO and president of Principal Financial Group, was honored Oct. 24 with the Lillywhite Award, presented annually by the Employee Benefit Research Institute.

The announcement was made by Barbara Marder, president and CEO of EBRI, at Pensions & Investments’ Defined Contribution West Conference in San Diego. She praised him as “incredibly accomplished” in his efforts to improve retirement security and “a very nice guy.”

Named after the late Ray Lillywhite, a pioneer in the pension field, the award is presented to employee benefits professionals for lifetime contributions to Americans’ economic security.

Houston received the award “because of his longstanding dedication and support of non-profit organizations and his thoughtful desire in the provision of fact-based research for the development of a better United States retirement policy,” EBRI said in a statement describing his accomplishments.

“Dan has been involved in the direction of the Employee Benefit Research Institute for more than a decade,” EBRI said in citing three reasons for granting the award: his role in EBRI’s leadership for more than 11 years, including chairperson; his work at Principal; and his “contribution to retirement and investment research and the community in general.”

Houston joined Principal in 1984. He was named president and chief operating officer in 2014 before assuming his current role in 2015.

“I wanted to do something that made a difference in peoples’ lives,” Houston said in a prepared video statement explaining why he joined Principal.

“Financial security is not just a personal achievement but a societal imperative,” he said. “It is our collective responsibility to help ensure that everyone has access to the tools and knowledge needed to secure their own financial future.”

Although the public and private sectors have made great progress, “there are still millions of people who lack access to basic financial services who face financial insecurity.” Financial security, he added, should be “a fundamental human right.”

―By Robert Steyer

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