PLANSPONSOR - April/May 2019 - 31

2019
ears. She can tell us what employees may be concerned about. "
When people plan for retirement, they will need to face more
than the financial aspect. They also need to prepare psychologically
for the emotional separation of leaving a company that has
been so much a part of their lives, Parham explains. " We partner
with our health care team because we have certain health benefits
that may or may not come into play. We bring many different
resources together, at several different locations each year, to
discuss how to prepare for your retirement. "
Southwest automatically enrolls employees at 3% and
promotes a voluntary automatic increase, along with matching up
to nearly 10% of deferred pay. " We've done a lot of analysis, and,
as a whole, we don't feel that our employees are lagging, " Parham
says. " And we feel the profit sharing complements the 401(k). "
The median lifetime income score of employees is 102%.
The percentage indicates how likely they are to be able to replace
75% of income. Employees who are on track receive a score of
100%. Over half of the population scores above that, which
confirms that Southwest is preparing employees for a comfortable
future, Parham says. Still, the rest are not there yet, so, she
says, the team continues to educate.
Empower, also, conveys a message about saving, through
visual means. When employees log on to its website, they can see
a green circle, representing their retirement readiness; it may be,
for example, 50% or 65% full. They are shown that, if they take
action, they can reach that 100% mark.
Patrick Heffner, managing director of Empower
Retirement in Overland Park, Kansas, and the firm's recordkeeper
relationship manager, says he is especially impressed
with how Southwest's executives connect with the other
employees. " It's very casual, friendly and warm. I've seen Julie
Weber, vice president and chief people officer, talking with the
employees at some of these events, and pretty much every other
member of the team interacts the same way. You might think
the vice president of a company such as Southwest stays behind
the scenes-that's not the case. They [all] treat a new employee
the same way as they treat someone who has been with the
company for 30 years. "
Rallies and Parties
Southwest generally has about four rally events per year. One
precedes the announcement of the profit-sharing contribution.
Heffner describes a rally as a combination of a rock concert and
a sporting event, held in a large sports complex and attended by
7,000 to 8,000 happy, loud employees. Formal presentations are
made by senior leaders of the company, including CEO Gary Kelly.
" Inside the venue, they'll have a blimp flying around dropping
prizes and vouchers for things such as shirts, towels and hats, "
Heffner says. " Outside, they have circus-like tents set up, and they
bring in 50 to 70 food trucks. Every employee gets coupons for
food and drinks-soda, water, wine, beer-whatever they choose. "
Heffner says there is a benefits area where Empower, for
one, sets up a large table and gives away a hand-out related to the
profit-sharing plan. Additionally, as employees move past each
provider's table, they receive a game piece. If they collect all of the
game pieces, they are entered in a raffle to win prizes.
" It's not unusual for us to talk to 1,000 people who come
through, " says Heffner. " Each year, we have an objective. One year
it was to get people to register online. Another year it was to be sure
a retirement plan beneficiary was designated. "
" We're not just working
with resources and assets,
but with people who are
important to us. "
After the event, Empower debriefs with the Southwest team
to see what was learned, and the team uses this information as
agenda items going forward.
" Deck parties " are held every two weeks on the deck at corporate
headquarters. These are company happy hours, open to all
employees, that coincide with the first day of Southwest's newhire
classes. At each party, the roughly 300 to 400 new hires have
their first experience with the Southwest culture. Heffner says,
" We talk about the retirement plan, and in general these parties
demonstrate [Southwest's] whole approach. "
The company carefully documents all of its processes related
to the retirement plans and conducts annual plan committee
fiduciary training plus fee reviews. Investment performance
analyses and plan strategies are reviewed at least quarterly.
Competitively priced passive target retirement trusts with fiveyear
target retirement dates recently replaced actively managed
target-date funds (TDFs) with 10-year retirement dates.
Currently, Southwest is in the process of introducing full
integration of health savings account (HSA) assets on its recordkeeping
platform, which will include investment mirroring.
The company also plans to roll out a campaign to promote postemployment
asset retention, in anticipation of expanded decumulation
strategies. -Judy Faust Hartnett
Total Retirement Offering Finalists
Occidental Petroleum Corporation Houston, Texas
OOCL (USA) Inc. South Jordan, Utah
Sumitomo Machinery Corporation of America
Chesapeake, Virginia
Read the full finalist profiles on plansponsor.com/PSOY2019.
PLANSPONSOR.com April - May 2019 31
http://www.plansponsordigital.com/plansponsor/april-may_2019/TrackLink.action?pageName=31&exitLink=http%3A%2F%2Fplansponsor.com%2FPSOY2019 http://www.plansponsordigital.com/plansponsor/april-may_2019/TrackLink.action?pageName=31&exitLink=http%3A%2F%2FPLANSPONSOR.com
PLANSPONSOR - April/May 2019

Table of Contents for the Digital Edition of PLANSPONSOR - April/May 2019
