Roger Buchtman, controller at Fort Wayne Metals Research Products Corp., said his company requires employees to attend annual open enrollment meetings for its 401(k) plan, and those who opt out must complete an acknowledgment form. “Our ultimate goal is 100% participation,” Buchtman said. “We know we may never get there but that’s what we try to achieve.”
The company has 95% participation, including full-time and part-time employees—part-timers make up about 8% of the company’s work force. The company match is 50% up to 7% of base salary, and the plan also offers profit sharing at 2% of earnings.
Buchtman said the mandatory annual enrollment meetings are important for targeting those who may have reduced or stopped their contributions because of the economy or other financial issues. The company also targets employees over age 50.
Aimee Lowry, benefits division chief of the Fairfax County government in Virginia, said it is important for employees to have individualized retirement readiness goals because different age groups have different needs. “We are challenged by an evolving work force,” she said.
For instance, the younger work force is more transient than older generations and therefore may have several retirement plans throughout their lives.
Fairfax County offers a holistic approach to retirement that includes financial and physical readiness. It has a “strong retiree medical program,” Lowry said, as well as financial programs. If employees become financially healthy, she said participation rates will improve.
In Lowry’s opinion, nothing beats meeting face-to-face to understand what employees really need. “I truly believe there is no substitute for boots on the ground,” she said. “So we really have sort of immersed ourselves.”
In addition to meeting in person, Fairfax has print campaigns in multiple languages. Because it has such a diverse work force ranging from doctors to landscapers, Lowry said specialized communication is key.
Bob Tomaschko, director of compensation, retirement & HRMS at Land O’Lakes, echoed the importance of communication in improving retirement readiness and participation rates. Despite his company offering automatic enrollment and helpful tools to prepare employees, he said it does not substitute for traditional communication. In fact, he said communication is even more vital when auto features are in place. "We do believe that we have to be out there providing communication and education to our participants,” he said.
Tomaschko is also a believer in advice, which he said can generate higher returns for participants. Many participants at his company have accessed the available online advice and it has received a positive response.
Tomaschko anticipates an increased prevalence of managed accounts in the industry as a whole.