PLANSPONSOR - April/May 2018 - 88

PLAN PROFILE
Bonus Deferral Option
G
artner, a research and advisory
firm headquartered in Stamford,
Connecticut, provides information
technology to businesses worldwide.
The company 401(k) focuses on retirement
outcomes in two ways, according
to Senior Manager, Capital Appreciation
Plans, Michelle Coster.
The plan is designed, first, to maximize
participant savings and, second,
to offer strong-performing funds at very
low investment costs. As of last June 30,
the plan's weighted investment cost was
0.23% compared with a peer median
weighted expense ratio of 0.56%.
To maximize participant savings, the
plan automatically enrolls all employees
at 4%, which gets the full company
match, and then automatically increases
participant contributions by 1% on an
annual basis. According to Coster, " Our
goal is to ensure that our associates are in
a good position to retire when the time is
right. We also utilize help from Financial
Engines, which offers free online advice
or a managed account service to our
associates to help them prepare better
for retirement. " Moreover, this year, the
plan adopted a true-up provision to make
whole any missed company matches
for associates who max out their annual
savings before year end.
Gartner is always looking for new
initiatives, to help increase participation
and deferrals. Currently, two being examined
are: an annual re-enrollment project
for those not utilizing the full company
match or who have opted out of the 401(k)
plan, and adding a socially responsible
fund to the investment lineup.
SNAPSHOT
PLAN
SPONSOR:
Gartner
KEY PLAYER:
Michelle Coster, senior manager,
capital appreciation plans
88 PLANSPONSOR.com April-May 2018
PARTICIPATION
RATE:
96%
Art by Chris Buzelli
AVERAGE
DEFERRAL RATE:
12.8%
NUMBER OF
PARTICIPANTS:
10,531
TOTAL
ASSETS:
$1.15 billion
Participants may elect a different percentage than taken from their pay
differentiate, and whatever election they
selected applied to both salary and bonus,
whether 4% or 0%.
This is only one new deferral option
participants encounter when logging into
their account, on Fidelity's participant
website. Based on their circumstances,
they also can choose from pre-tax, Roth,
catchup, involuntary after-tax, 401(k)
pre-tax bonus and 401(k) Roth bonus.
Participants have flexibility to decide
how to, respectively, allocate their salary
and their bonus payments, for example to
defer 10% pre-tax of their base salary and
25% 401(k) Roth bonus.
To maximize participant adoptions,
Michelle Coster, senior manager,
capital appreciation plans, Gartner
In January 2016, Gartner adopted
a company bonus deferral option
whereby associates can vary their deferral
percentage between their base salary and
their bonuses. Where did idea come from?
Coster says, " Several years ago we had
inquiries from participants, saying they
were interested in contributing a different
percent of their bonus to their 401(k)
account. Our understanding is that some
participants really need the additional
money in February, when the bonuses are
given, and defer little or nothing. Those
who earn a higher salary or who don't need
the bonus money at that time may prefer to
defer more than their base salary deferral. "
Before this new feature was implemented,
associates lacked the option to
Coster says, " we had a great communication
made up. Our legal team helped us
explain the new feature and how it works.
Participants have until January 30th each
year to decide if they want a separate bonus
election. When the feature was set up, we
had bonus deferrals mirror [the person's]
current election in the system. "
If a participant wanted to go in and
change the amount, actively, he could, the
communication explained, and if he did
nothing, the amount would remain the
same as before the plan design change.
The communication also indicated that
participants had until February 10 to
choose to do nothing and be auto-enrolled
at their current percent or to elect a new
bonus deferral.
The message reached its audience.
Coster notes that, out of Gartner's entire
active population, 56% elect a different
percent for their bonus than for their
regular salary or commission percentage,
throughout the year. -Judy Faust Hartnett
http://www.PLANSPONSOR.com
PLANSPONSOR - April/May 2018

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