PLANSPONSOR - March 2012

50% up to the first 6% of an employee’s contribution. Employees also get a profit-sharing contribution from the company that varies from year to year and goes into their retirement plan account, whether the employees contribute to the 401(k) or not.

Employees who work at least 1,000 hours in a year can participate, and open enrollment happens twice annually. At open-enrollment time, the company holds separate meetings in three different languages: English, spanish and Haitian Creole. The latter two meetings include a translator and a video about the plan, produced in their language and focused on that particular culture. “We have done testimonials from people in the plant that they recognize, talking about their experience with saving money, or their account growing,” Cable says of the videos. Attendees also receive all the written enrollment material in their language.

Many of the company’s hourly employees come from cultures that do not have a concept of a retirement life stage— “basically, work until they die,” Cable says of the philosophy. so the sessions get as basic as explaining the idea of retirement.

Non-English speakers like that these
meetings give them a chance to ask
questions and get answers in their own
language. “A lot of concern with that
group is tracking where the money is
going, and trusting that it will be there
when they leave,” Cable says. “Trust
is a big part of the education. They
hear that companies are bad, and take
people’s money. They want to under-
stand that it is safe.”
Non-English speakers tend to ask a lot
about investment basics. “We try to
get them to understand risk, because
that is often not a concept that they
understand,” Cable says. The company
suggests that employees unfamiliar
with investing start off with the asset-
allocation models available in the plan.
The models are broken down into three
age groups— 20 to 44, 45 to 59, and 60
or older—and, within each age group,
participants can pick from three different
risk tolerances: conservative, moderate,
or aggressive. —Judy Ward

Parkview Medical Center Participants in Parkview Medical Center’s 401(k) plan currently have an average 53.93% income-replacement ratio—and that does not include social security, for which they are eligible, or any retirement savings outside the plan. Why are so many in relatively good shape? Auto-enrolling new and existing employees, making a 4% contribution to employees’ accounts on top of the match, and one-on-one education explain much of it.

The Pueblo, Colorado hospital, founded in 1923 and incorporated as a Colorado nonprofit corporation in 1983, has a $100 million plan with 2,361 participants and a 90% participation rate. Parkview measures participants’ average income-replacement ratio on a plan basis annually, and gives participants access to their individual replacement-ratio estimate. The employer has not set a target replacement ratio it wants participants to reach, but the number did increase from 52.99% in 2010. “As long as we continue to see incremental increases, that tells me that we are making progress,” says Darrin smith, vice president, human resources.

In addition to auto-enrolling new hires
at 3%, in 2008, Parkview auto-enrolled
all existing employees not contributing
or contributing less than 3%. Most have
stuck with it. “our participation went
from 68% to 90%, and we have been able
to hold on to that rate,” smith says. If
the previous rate had continued, he says,
“there were going to be a lot of people
who were not prepared when they were
looking to leave the workforce.”
Participants have to sign up proactively
for automatic contribution increases,
however. “We did not do auto-escalation.
We figured, we will take it one step at a
time,” smith says. “If they put in 3%, at
least they get the full advantage of what
Parkview is willing to match.” Parkview
matches 50 cents on the dollar for the
first 3% of an employee’s contribution.
Plus, after a year of working at Parkview,
employees start getting an annual contri-
bution to their account of 4% of their
gross salary, even if they do not put
money aside themselves.

Participants who want access to their individual replacement-ratio estimate can do it on their own, visiting recordkeeper Principal Financial Group’s website. or they can learn about it at the monthly one-on-one sessions that employees can sign up for when staffers from Principal and retirement plan adviser Moreton Retirement Partners come on-site.

Employees who go to the Principal website can input the assumptions they want in their ratio calculation, such as when they will retire and how much retirement income they need. They can learn the effect that changes such as different contribution levels ultimately could have on the value of their account. The idea is to answer the question, “Here is where I am today. Am I saving enough?” smith says. “It will give you a pretty good perspective.” Participants coming up short see their specific income gap. “It tells them, ‘If you continue on the same pace of contributions and your retirement date, you are going to be short by X dollars per month,’” he says. —Judy Ward

Symantec Corp. Historically, symantec Corp. has done the typical things plan sponsors do to help improve 401(k) participants’ saving and investing results: plan analysis looking at factors like average deferral rates and participation rates, then participant education focused on the deficiencies, but that could only help so much.