Not many companies give part-time and temporary workers a matching contribution, she said, adding that the new benefit motivated her to push for automatically increasing the deferral rates of plan participants contributing less than the 5% needed to maximize the company match. In other words, any of the 1,792 participants contributing less than 5% would automatically be boosted to a 5% deferral.

NACCO matches employee contributions dollar-for-dollar, up to 5% of their pay.

While employees could lower their contribution rate, the company discouraged them from doing so as they would leave “free money” on the table, Fry said.

In addition to automatically boosting everyone’s deferral rate to 5%, it also enrolled participants in auto escalation and re-enrolled workers who had previously opted out of the plan.

Very few workers complained or opted out of the changes because they were told about the changes in advance, Fry said. “Our local HR staff made sure that everybody knew this was going to happen,” she said.

As a result of the campaign, the number of people contributing less than 5% dropped to 19 from 50. Only six opted out of the automatic annual 1-percentage-point increase to their deferrals, Fry said.

Part of the reason few people opted out of auto escalation or reversed the higher deferrals also had to do with two changes to the re-enrollment process, according to Fry.

In addition to shortening the length of time that workers had to opt out of the changes by one week, the company also timed the higher deferrals and the auto increase with the annual merit increase pay period, which mitigated the impact of the changes. Plan participation also improved, ticking up to 99% from 97% in 2023.

By Fry’s latest count, only 10 people are not participating in the company’s $764 million 401(k) plan. “We’re trying to figure out how we get to these handful of people,” Fry said. “I guess you’re going to have some people who are very stubborn and just don’t want to do it, and you just have to accept it.”

―By Margarida Correia

The staff of 10 advisers — all either certified financial planners or in the process of becoming CFPs — played a key role in educating participants about significant plan changes that started in 2017 with the streamlining of investment options and concluded in May with the implementation of a target-date fund with an embedded annuity — the BlackRock LifePath Paycheck fund — as the plan’s qualified default investment option.

“They’re out there meeting with participants face-to-face, doing new employee orientations and helping people,” Jimenez said of the financial advisers employed by AHRP.

Jimenez explained that the advisers — whom he refers to as financial educators — are paid a salary and don’t make commissions, and are themselves participants in the $11 billion plan.

“The participant can feel that there’s no underlying motive for a financial educator to be talking to them about what they should be doing, what they should be considering and what might be best for them,” Jimenez said. “They can feel comfortable knowing that this person is going to give them great advice.”

The advisers were critical in helping Adventist's 170,000 participants understand the BlackRock LifePath Paycheck fund, which AHRP made available after an exhaustive evaluation process.

AHRP had previously offered a “super complex” in-plan variable annuity that few participants used, Jimenez said.

The BlackRock product was relatively easy to understand and provided the guaranteed lifetime income that AHRP was seeking for its female-dominated workforce.

The BlackRock LifePath Paycheck target-date series acts like an ordinary target-date fund until participants hit age 55, at which point the fund allocates 10% of the balance to a new asset class called “lifetime income.” The allocation to lifetime income grows gradually to 30% by the time participants reach 65.

When participants are between the ages of 59½ and 71, they have the option to use the money set aside for lifetime income to purchase an annuity from insurers selected by BlackRock.

The new target-date fund with a built-in annuity would help “those concerned with outliving their savings,” Jimenez said, adding that the product would help participants “spend better” in retirement.

Jimenez explained that some people are so afraid of outliving their savings that they don’t spend as much as they should to live comfortably in retirement.

Some, he said, don’t tap their 401(k) plans, living instead on Social Security and any income they receive from pension plans.

In his experience working with other plans, Jimenez said many participants aren’t taking regular income streams from their 401(k) plans until they’re forced to through required minimum distributions.

“Guaranteed income changes a participant’s mindset and brings them some relief,” Jimenez said.

―By Margarida Correia

Many people are unclear on how to turn their savings into monthly income in retirement, said Mark Meigs, TVARS' executive secretary and winner of an Excellence & Innovation Award.

With the new LifePath Paycheck funds, participants will be able to establish a lifetime income stream in the form of a "monthly paycheck for life,” he said.

The BlackRock LifePath Paycheck target-date series acts like an ordinary target-date fund until participants hit age 55, at which point the fund allocates 10% of the balance to a new asset class called “lifetime income." The allocation to lifetime income grows gradually to 30% by the time participants reach 65.

When participants are between the ages of 59 ½ and 71, they have the option to use the money set aside for lifetime income to purchase a guaranteed lifetime income stream from insurers selected by BlackRock. Meigs said that the new offering will set up the “employees of tomorrow” for success as they don’t have pension plan benefits as some of their older co-workers do.

“The TVARS board wanted to be able to offer a pension-like option in the 401(k) plan for those who have no pension or have a frozen pension,” he said, adding that the TVARS’ pension plan closed in 2014.

Working with BlackRock, TVARS developed a comprehensive communications campaign explaining the new investment option that included a custom microsite, videos, brochures, postcards and two sets of FAQs.

The microsite exploded when it went live in June, receiving more than 750 clicks in the first three days, triple regular website traffic.

“We tried to customize the materials to where it was not just generic messaging,” said Sally Weber, manager of retirement operations for TVARS.

As a result, TVARS had very few questions from participants when the LifePath Paycheck funds were introduced, with nearly half of the plan's 15,034 participants — or 7,023 — invested in them as of June 30, she said.

Nevertheless, participant education about the new investment is ongoing. “We’re rolling out some group sessions that will be going on in October, both virtual and in person, to continue to educate our participants,” Weber said.

The five-year effort was not without challenges, including getting buy-in from TVARS’ seven-member board.

“It took a longer time and more in-depth evaluation than expected,” Weber said.

Probably the biggest challenge was persuading Fidelity, TVARS’ record keeper, to build out the platform to support BlackRock’s new investment option. Fidelity agreed to move forward once other large Fidelity clients, including Adventist Healthcare Retirement Plans — another Excellence & Innovation Award winner — also decided to implement the BlackRock LifePath Paycheck target-date fund.

“It was a bit out of our hands and relied upon a long-term partnership that we’ve had with both of those outside entities,” Meigs said, referring to Fidelity and BlackRock.

“It couldn’t have happened without Fidelity’s partnership to set up a platform to make this offering available,” he said.

―By Margarida Correia

Before the campaign, only 14.1% of plan's 7,600 participants were on track to meet the 75% income replacement metric. After the re-enrollment, the percentage jumped to 32%.

While the rising stock market accounted for about 25% of the increase, the “other 75% was the re-enrollment,” said Murtaugh, the winner of an Excellence and Innovation award.

As part of the campaign, employees contributing less than 6% to the 401(k) plan were re-enrolled at the default savings rate of 6%, a move designed to maximize the company’s employer matching contribution.

The company matches 50 cents for every dollar employees contribute to the plan, up to 6% of pay.

In addition to automatically boosting their deferral rate, International Motors also enrolled them in auto-escalation, meaning their deferral rate would automatically increase by one percentage point a year, up to 15% of pay.

Employees contributing 6% or more were re-enrolled at their current savings rate with auto-escalation activated on their behalf.

The auto-escalation for employees saving at 6% was “very important” because many of them had taken no action to boost their savings since they were first hired, Murtaugh said.

“They stayed at 6% all these years,” she said.

Murtaugh added that the company only had a “handful of complaints” from employees over the re-enrollment.

“As long as they know that they can opt out of it, a lot of people of people are willing to just try it,” Murtaugh said.

Murtaugh recalled a benefits administrator who declared that she was not going to opt out of the higher savings level and the auto escalation into which she was defaulted, saying she “was going to see if she can handle it.”

“They’re great tools,” Murtaugh said of automated plan features. “As long as you communicate them and employees know they can opt out, there’s not too much noise about it.”

International Motors also changed the vesting schedule on the employer match, making employees immediately vested rather than having to wait five years to get the full amount of the match.

“I see it as sort of a fulfillment of the contract between the company and the employee,” Murtaugh said. “When employees contribute, the match should have no restraints.”

Lastly, International Motors added a true-up contribution, a measure that helped further boost employee retirement preparedness.

Murtaugh explained that the true-up contribution was designed for employees who can’t contribute the full 6% consistently throughout the year. An employee might, for example, contribute 3% for the first six months of the year and then switch to 9% for the remainder of the year. While such an employee has indeed contributed the required 6%, he or she would not get the full 50% match on 6% because he or she was just contributing 3% for half the year.

The true-up contribution would settle the difference between the full match and the actual employer matching contributions made during the calendar year.

For Murtaugh, the true-up contribution boils down to the match commitment the company made. “You contribute, we contribute,” she said. “We should take all the other conditions off that match contribution.”

―By Margarida Correia

“We maybe got two or three calls out of 4,600 employees,” she said.

U.S. Venture matches 100% on the first 2% that employees put into their 401(k) accounts plus 50% on the next 4% they put in. The company was looking to get employees to contribute 6% of their pay to get the maximum 4% employer contribution.

To do so, the company automatically increased the deferral rates of those contributing less than 6% to 6%, giving them the option to opt out of the increase.

“It seems like it’s definitely benefiting the vast majority,” Paulson said of the company’s new “auto boost” plan feature. “We continue to be thoughtful in how we communicate to make sure that those three who complain turn into zero, but you don’t always hit everybody with communication.”

As a result of the “auto boost,” 85 additional savers are contributing 6% or more to the plan on a pretax basis, bringing the percentage of people maximizing the match to 90%. The industry average is 69%, Paulson said.

The company, however, didn’t stop with those contributing less than the 6% needed to get the full company match. It also targeted employees contributing 6% or more by enrolling them in automatic escalation, a feature that increased their deferral rate by 1 percentage point a year, up to 15%.

The deferral rate auto-boost for undersavers and the auto escalation were part of a suite of auto features that was implemented to improve participation and deferral rates in the company’s $368 million 401(k) plan, Paulson said.

The company also automatically enrolled all employees in the plan and re-enrolled those who had previously opted out, moves that helped drive plan participation and average deferral rates, according to Paulson.

At the end of 2023, the plan had a participation rate of 93%, greater than the industry average of 83%.

“I am proud of the fact that we continue to see high numbers of team members continue to participate in our 401(k) plan,” Paulson said. “I think having 90-plus percent in the plan just shows that the financial education and the communication we're doing is helping our team members understand that it is good for them to think about their retirement and their financial savings.”

―By Margarida Correia

The data showed that the system’s American Indian, Pacific Islander and Black American populations lagged the average employee in retirement readiness, a metric that measures an individual's ability to replace 75% of projected income at age 65 through anticipated life expectancy. Only 75% of Black Americans, for example, were on track to achieve retirement readiness, four percentage points behind the 79% of the overall population that was on track.

With auto escalation, the disadvantaged groups would get more of a bump in their retirement readiness than the workforce would get as a whole, Rabuck said.

For example, Black Americans would improve their retirement readiness by 4 percentage points, whereas the total workforce would get a boost of approximately 3 percentage points.

“This feature would get 4% more of our Black, or African-American teammates over the retirement readiness goal line vs. the 3% improvement for the overall population,” Rabuck said. “Once we saw the impact that auto-escalation would have on fast-forwarding certain populations within IU Health, that was the final push that said this makes total sense to do this,” Rabuck said.

IU Health implemented an auto-escalation feature that automatically increased employee deferral rates by one percentage point annually, up to 12%.

The team also looked at disparities within different divisions and found even greater inequalities.

Of the 10 divisions evaluated, some had workforces that were less than 70% retirement ready.

With auto escalation, these divisions would improve their retirement readiness, with one division expected to “get 6% more teammates across the retirement readiness goal line," Rabuck said.

Despite the strong numbers, some members of the retirement plan committee were still skeptical of the auto-escalation measure, saying plan participants who lived paycheck to paycheck would object.

Their reservations, however, subsided as committee members learned that the auto escalation would occur at the same time that employees received their annual pay increases, a move that would “take the sting out” of the higher deferral rates, Rabuck said.

The retirement plan committee also drew comfort from the fact that participants could always opt out.

“Participants can always shut that off if they want to,” Rabuck said, referring to auto escalation.

It’s still too early for IU Health to track the impact of auto escalation on workforce retirement readiness as the feature was only implemented in July, but one indicator seems promising.

Opt-outs have been low, at less than 14%, Rabuck said.

Participants also haven’t complained, providing IU Health with another hopeful sign.

“It’s been quiet, which I think means it’s a good thing,” Rabuck said.

―By Margarida Correia

“We knew that our employees were struggling,” said Ben Roberge, assistant vice president of financial wellbeing and retirement programs at Unum and the leader of a team that won an Excellence & Innovation Award. “We had a strong retirement savings program in place and a competitive employer match, but we knew we needed something that was a little bit more immediate that would help our employees.”

Roberge explained that a workplace well-being survey showed that financial stress dominated three of employees’ top five concerns.

While employees initially enrolled in the program on a voluntary basis, all newly hired employees are now automatically enrolled in the program if they earn less than $150,000 a year, a practice that started in April 2023. All new hires are enrolled at a 1% post-tax savings rate, which employees can increase to as much as 50%, provided the amount doesn’t exceed $10,000 annually. Employees can opt out of the program at any time.

Employees can select any investment within the company’s 401(k) plan for emergency savings, but if they do not make a selection and they are automatically enrolled, their emergency savings is invested in the target-date fund used as the 401(k) plan default investment option, Roberge said.

Roberge added that while Unum does not provide a match on contributions made to the emergency savings accounts, it might consider doing so in the future.

Unum’s program is bolder than the in-plan emergency savings accounts under SECURE 2.0, which cap emergency savings at $2,500. The program was developed prior to the legislation coming out.

“Our program offers a little bit more flexibility,” Roberge said.

Roberge is heartened by the program’s strong participation metrics.

“Over 40% of our employees are continuing to stay in and participate in the accounts,” he said, adding that they’ve collectively saved more than $1.2 million in emergency savings.

Roberge noted that even though employees are drawing money from their emergency savings accounts, 85% continue to contribute. “They continue on a regular basis to contribute to the account, and almost 92% of them have an account balance,” he said.

Another positive is that the program has not caused employees to decrease their contributions to their 401(k) retirement savings accounts, with the average deferral rates holding steady at more than 7.7%.

Lastly, the program has had an unexpected positive impact on employee turnover.

“We are seeing that employees who are contributing to this account are turning over on a less frequent basis by about almost 40% than employees who aren’t contributing,” Roberge said.

―By Margarida Correia