PLANSPONSOR - April/May 2018 - 26

Corporate 401(k) >$50mm - $100mm
Hendrick Motorsports
F
ive years ago, Hendrick Motorsports,
in Charlotte, North Carolina, started
thinking more seriously about its 401(k)
plan's health. " It became clear to me that
401(k) plans, as implemented at the time,
would not provide adequate assets for our
employees, " Chief Financial Officer (CFO)
Scott Lampe says. " People were not saving
enough, early enough, and their investment
decisions were too passive. "
Rick Hendrick, owner/operator of four
NASCAR racing teams, had just begun
partnering with adviser Kathleen Kelly of
Compass Financial Partners LLC, so had a
good opportunity to evaluate changes.
Lampe saw the business case for
improving plan health for Hendrick
Motorsports' 401(k). " I am convinced
that employees who have a solid financial
foundation will be more effective
in their job. They will have less stress
in their life and will be more focused at
work, " he says. " As folks get older, they
are in a better position to retire and give
opportunities for our younger employees.
That transition creates motivation for
our younger staff and creates a situation
where we appreciate the experience of our
older employees while we anticipate what
the younger ones can offer. "
'What Are We Doing?'
The 600-employee work force at Hendrick
Motorsports-whose popular NASCAR
drivers have included Dale Earnhardt Jr.,
Jeff Gordon and Jimmie Johnson-has
diverse demographics. " Our employees
have a wide range of jobs, from builders
and fabricators of our race cars, up to Ph.D.level
engineers who design the cars, " says
Human Resources (HR) Director Heather
Masterson. " And we've got a fairly diverse
range of ages, from interns still in college
to individuals in their upper 70s. We've got
people who have been with Mr. Hendrick
for more than 30 years. "
Masterson joined the company in
January 2014 and serves on the sixmember
plan committee, which started
looking closely at its 401(k) plan around
that time. " We asked ourselves, 'Are we
really preparing our employees to retire?' "
she recalls. " What led us to this question
was we had a few employees who were
ready to retire-one was in his 70s and
another in his early 80s-and they didn't
feel like they could at that time, because
they hadn't saved enough money. We
decided we had to take that situation from
the standpoint of, 'What are we doing?' "
Masterson says the committee got insight
from plan-health reporting provided by
Compass Financial Partners that benchmarked
the plan's features.
The committee decided to move
from a 50% of 5% match to a " stretch "
match of 33.3% on 9%, to encourage
employees to contribute at a higher rate.
26 PLANSPONSOR.com April-May 2018 Art by Chris Buzelli
TOTAL PLAN ASSETS/PARTICIPANTS:
$77.8 million/748
PARTICIPATION RATE: 93%
AVERAGE DEFERRAL RATE: 8.71%
DEFAULT DEFERRAL RATE: 4%
DEFAULT INVESTMENT: JPMorgan
SmartRetirement Target Date Series
AUTOMATIC ENROLLMENT: Yes
AUTOMATIC ESCALATION: Yes
EMPLOYER CONTRIBUTION: 33.3% on 9%
The plan also added automatic enrollment
and automatic escalation for the
first time and completed a re-enrollment
to the plan's target-date funds (TDFs).
" From my perspective, having been with
other employers before Hendrick, these
were things that we had done successfully, "
Masterson says. " And I knew that
at Hendrick, we had a lot of 'do it for me'
employees who didn't want to have to
think about their 401(k) account. "
Since those initial changes, Hendrick
Motorsports has continued to adjust plan
design. Effective last year, the plan's autoenrollment
default deferral increased from
2% to 4%, and automatic escalation got
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