each person’s progress. “The meetings
they are doing now are, ‘How did you
do against the goals that you set for the
year?’ That gives some accountability to
employees,” Pate-Gurule says.
For those with broader financial
concerns, the company offers a program
called “My secure Advantage” as
an add-on to its employee-assistance
program (EAP). The program focuses on
employees’ financial health, and they can
get help with things like setting a budget
for their family or how to do debt consol-
idation and repayment. The program
helps the 401(k) plan, Pate-Gurule says,
since employees who do not contribute
most often say they cannot afford it.
“They show them, ‘This is how you get
your finances in order, so you can save
for retirement,’” she says. —Judy Ward
Public Defined Contribution Finalists
New York State Deferred
Compensation Plan
“In New York, we have a fairly good
defined benefit plan for state and local
government employees,” says Edward
Lilly, executive director of the New York
state Deferred Compensation Plan, “but
almost everybody is going to have some
sort of retirement-income gap that we
would like to help them fill.”
so, in 2010, the $12.7 billion plan
launched its “Missing Piece” employee-education campaign at government
worksites across the state. The plan has
128,000 state-employee participants
and 65,000 workers from local governments in New York state. The participation rate runs between 35% and 40%.
Participation can be a tough sell, given
employees’ existing defined benefit plan
coverage and eligibility for social security benefits as retirees. The pension
plan gives a retiring state or local
government employee with less than 20
years of service 1.67% of pay for each
year he or she worked, multiplied by
the employee’s three-year final average
salary. After 20 years of service or
more, that increases to 2%.
The upshot of the Missing Piece
campaign’s message to employees:
“You have these things, but you need
more,” Lilly says. “We can help fill in
that missing piece for you. It is basically
a retirement-income-gap scenario.”
It helps to go beyond talking about
benefit percentages and talk about the
bottom-line impact in retirement: When
told that he or she will have to live on
$15,000-a-year less in retirement, he
says, that hits home with a worker.
The campaign includes several types of
on-site sessions: one about enrollment
for nonparticipants, one about asset
allocation, and one for those close to
retirement. “During the day, we will
probably offer all three seminars, so
that employees are able to get to the one
that they need,” Lilly says. They generally run about 45 minutes. Nationwide
Retirement solutions has 17 account
executives on its staff who work only on
the New York state deferred comp plan,
and they go around the state offering
these seminars and discussions.
In addition, employees have a new way
to save: After Congress passed legislation in 2010 allowing in-plan Roth
conversions by participants eligible
to receive a distribution, plan officials
decided to allow both Roth 457 contributions and in-plan conversions. so
they spent two months revising the plan
document, the board adopted it and, in
January 2011, submitted the plan document to the Internal Revenue service
(IRs), requesting a determination letter.
“Anytime you go to the IRs, it is
daunting,” Lilly says, “but we believe
it is best practice, when we make a
substantial revision to the plan document, to get an IRs review.” The IRs
gave the compliance the thumbs-up in
september 2011, and plan officials were
told it was the first IRs determination
letter issued to a public employer’s 457
plan that included Roth contribution-related provisions.
The plan started offering Roth deferrals
in July, then conversions in December.
By the beginning of February, about 600
people had started making Roth contributions. —Judy Ward
San Diego County
Deferred Compensation
Plan
“Everybody responds differently when
it comes to money,” says Lyn Howarth,
deferred compensation coordinator for
the county of san Diego. “We have a
very diverse employee demographic,
with their education and experience
when it comes to financial issues.” so,
when conducting employee communication about the deferred comp plan, she
says, “We try to make it real, and do it
in different ways, because it is real in
different ways for different people.”
The education consistently stresses the
big picture of retirement-income needs.
“I always look at it as, I heard somebody once refer to retirement planning
as a jigsaw puzzle, and he said that the
most important part of the puzzle is the
picture on the box,” Howarth says.
With changes to the county’s defined
benefit plan effective as of August 2009,
eligibility for a full pension increased
for new general hires from working 34
years and reaching age 60, to working
40 years and reaching age 62; for new
general hires, the accrual rate declined
