PLANSPONSOR - April/May 2020 - 37

AWARDS 2020 PLAN SPONSOR OF THE YEAR FINALISTS
Gene George, Division Vice
President, Financial Benefits/
Plan Administration, Health Care
Service Corp.
Health Care Service Corp. (HCSC)
Chicago, Illinois
PLANS: 401(k); DB. PLAN ASSETS: $2.3b in 401(k); $2b in DB. PARTICIPANTS:
33,000 in 401(k); 26,000 in DB. PARTICIPATION RATE:
94%. AVERAGE DEFERRAL RATE: 7%. RECORDKEEPER: Prudential.
ADVISER: Willis Towers Watson.
Health insurer Health Care Service Corp. (HCSC) sponsors
both an active pension plan and a 401(k) plan. The company,
which serves more than 16 million members, across five states,
revised the two plans to operate in sync over 20 years ago. The
pension benefit was tempered to deliver a moderate defined
benefit (DB), the thinking being that it would complement the
match-and-deferral-based benefit that the 401(k) participants
would accumulate. Part-time employees may participate in
both plans. After a re-enrollment in 2018, the 401(k) reached
a 94% participation rate despite the challenge of educating the
workforce-a large percentage of employees work remotely. The
educational effort starts with HCSC's onboarding program.
The company also offers quarterly webinars on retirement and
financial wellness issues. -JW
Kinder Morgan
Houston, Texas
PLANS: 401(k); cash balance plan. PLAN ASSETS: $2.3b in 401(k);
$2.1b in DB. PARTICIPANTS: 17,987 in 401(k); 31,576 in DB. PARTICIPATION
RATE: 91.56%. AVERAGE DEFERRAL RATE: 8.65%. RECORDKEEPER:
Empower Retirement. CONSULTANT: Mercer.
Energy-infrastructure company Kinder Morgan started a
review of its retirement benefits in 2017 that led to changes in
the 401(k) plan: The default deferral rate was doubled and the
automatic escalation ceiling increased to 12%. The company
aims for the 401(k) and cash balance plan together to help its
employees accumulate enough for retirement. " If we get them
started at 6% in the 401(k) and get them up to 12% and the
company puts in 5%, that's 17% they're saving, " says Chris
Noonan, director, benefits. The cash balance plan has a 4%
to 5% employer contribution. Kinder Morgan now displays an
employee's cash balance benefit amount alongside his projected
401(k) benefit, on the 401(k) participant site. -JW
RoyOMartin
Alexandria, Louisiana
PLAN: 401(k). PLAN ASSETS: $129mm. PARTICIPANTS: 1,300. PARTICIPATION
RATE: 98%. AVERAGE DEFERRAL RATE: 5.25% pre-tax/
Roth, 6.7% including after-tax. RECORDKEEPER: Newport Group.
ADVISERS: Thompson & Knight LLP, Newport Group Consulting.
The RoyOMartin 401(k) plan has a 98% participation rate,
despite many of the employees being hourly. This wood
products company has had a defined contribution plan since
1956 and revamped it as a 401(k) in 2001. " We did automatic
enrollment from the start of the 401(k), " says Benefits
Accountant Stephanie Ulrich. " We also went to a guaranteed
match, plus profit sharing, in 2001. " Before that, the employer
made its contribution entirely through profit sharing, which
provided no guarantees, she explains. Profit sharing has run
as high as 13%, but averages 5%. Additionally, RoyOMartin
recently expanded its education for employees; they now have
free access to a financial counseling and wellness program
through Corporate America Family Credit Union. " Financial
wellness is a big thing that we do here, " Urich says. -JW
Sumitomo Machinery Corp. of America
Chesapeake, Virginia
PLANS: 401(k); DB. PLAN ASSETS: $44.7mm in 401(k); $41mm in
DB.
PARTICIPANTS: 394 in 401(k); 555 in DB. PARTICIPATION
RATE: 92.5%. AVERAGE DEFERRAL RATE: 8.5%. RECORDKEEPER:
Principal Financial Group. ADVISER: Capitol Securities.
Sumitomo Machinery Corp. of America has a couple of strategic
reasons for keeping its fully funded defined benefit (DB) plan
active while offering a 401(k) plan: recruiting and retention. " Our
pension plan is designed to replace 1% of pay for each year of
service, up to a maximum of 25 years, " explains Senior Director,
Human Resources, Michael Lulofs. Between the pension plan
and 401(k), " We like to see people replace at least 70% of their
income in retirement. " To boost participation and deferrals, in
2018, Sumitomo started an annual 401(k) re-enrollment. In the
two sweeps so far, 69 re-enrolled employees have stuck with the
6% default deferral. Free meetings with a Certified Financial
Planner help employees build a personal financial plan. -JW
PLANSPONSOR.COM April - May 2020 37
Chris Noonan, Director, Benefits,
Kinder Morgan
Stephanie Ulrich, Benefits
Accountant, RoyOMartin
Michael Lulofs, Senior Director,
Human Resources, Sumitomo
Machinery Corp. of America
http://www.PLANSPONSOR.COM
PLANSPONSOR - April/May 2020

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