Prudential currently provides education about fund allocation, range of asset
classes offered, reasons why employees
should save, and the time value of money
(TVM). Financial wellness education,
such as instruction on paying off debt
and student loans is also offered.
Kushner says they are currently
working on more innovative programs
to implement within the hospital. Some,
such as the financial wellness program
Prudential Pathways, will be part of
a three-year program, and some are
already under development. Further, the
hospital is looking at behavioral trends regarding retirement and
saving in Millennials, Generation X and other groups to better
understand what drives them toward financial stability.
The health system also engaged Prudential to educate
participants on how to create an income stream from their
savings. “Participants don’t know how to translate the account
balances to monthly income over time,” Kushner says. “We’ve
seen people take their money and go on a vacation or buy a car.”
The system currently allows participants to take systematic withdrawals from the plan and considers adding an in-plan
retirement income solution, Kushner says.
75% income replacement.
According to Tansil, Miami
Children’s is smart to acknowledge
the financial challenge an aging work
force can have on benefit costs. “It also
recognizes the opportunity-costs for
Millennials, who may choose to leave
if they don’t see a strong career path
ahead,” he says.
Others goals of the strategic plan
are: to sustain 95% participation and to
most efficiently use employer matching
dollars; to ensure on-time retirement
for employees; and to actively utilize
educational resources—e.g., adopting Prudential Pathways
to foster long-term financial security for employees. “Given
the hospital’s multi-generational work force, we are exploring
[means] to enhance our employer match formulas in [such a
way as] to put us in the best position to attract and retain key
talent,” Kushner says.
Since starting the strategic plan, the health system has
exceeded its participation-rate target, has maintained diversification where over 84% of participants are invested in four or more
funds, is implementing auto-deferral escalation, a Roth option,
and is continuing to take steps to benchmark fees and ensure
that the plan is competitively priced.
“We think we’re making progress, and we’re most proud
of our high participation rate,” Kushner adds. “We just have to
get employees to understand how much difference saving in the
plan makes with their retirement goals. It’s something we work
for day in and day out.” —Rebecca Moore
Baylor Scott & White Health
After formation by a merger, Baylor Scott & White Health, a not-for-profit health care system, cut its 16 plans to three—including
a 403(b)—and four recordkeepers to one. With that simplifica-tion, plus the recordkeeper’s helpful online tools, the 403(b) has
reached 68% participation and a 7.38% average deferral rate.
University of Massachusetts
Amherst, Massachusetts (main campus)
Employees of University of Massachusetts (UMass), a five-campus
public university system, reduced six recordkeepers to two, greatly
slashing investment options in its 403(b) plan, then performed a
re-enrollment. The result: Participation grew 4.23% in one year and
more employees now hold appropriate portfolios.
Read the full finalist profiles on plansponsor.com/PSOY2017.
Last year, the
strategic plan ...
Three-Year Strategic Plan
Last year, the health system began executing a documented three-year strategic plan, created jointly with Prudential, to not only
sustain the gains of the retirement program achieved so far, but to
better define the path forward.
One of the guiding principles for this plan is that more automation, and less manual involvement, improves efficiency, while
better cost management reduces the financial impact to both
participants and the hospital.
According to Kushner, certain administrative processes had
involved manual intervention where that had been unnecessary.
“We have worked diligently to eliminate these areas and move
to an all-systematic administrative approach. A great example
would be auto-enrollment, where each new hire or rehire participant is automatically enrolled in the plan at 3%,” he says.
The strategic plan also strives to increase the awareness and
competitiveness of the retirement program, to support retention
and recruitment efforts of key skilled employees. Attracting and
retaining the best talent—in light of the hospital industry’s aging
work force, where one in three practicing physicians is over 65—is
a critical component for staying competitive.
The third guiding principle is to provide a program that
can help employees retire on time. Kushner says that goal is
based on employees having, from all sources, a minimum of