PLANSPONSOR - August/September 2020 - 34

2020 PLAN SPONSOR OF THE YEAR WINNERS
Total Retirement Offering
Sumitomo Machinery Corp. of America
Chesapeake, Virginia
E
mployees at Sumitomo Machinery Corp. of
America are among the dwindling ranks of
Americans who still have all legs of the threelegged
retirement savings stool: a defined
benefit (DB) plan, a defined contribution (DC)
plan and Social Security.
They also get individualized help to
put together a personal financial plan from
Sumitomo's adviser Capitol Securities
Management Inc. More than half of the company's
employees have gone through the process,
says William Stade, managing director of the
advisory firm, in Reston, Virginia
Recruiting and Retention
Sumitomo has a couple of strategic reasons
for keeping its fully funded DB plan active:
recruiting and retention. " In our [machinery
manufacturing] industry, it definitely helps
us to attract the kind of employees we want, "
says President and CEO James Solomon of
Sumitomo. " And we want to have a lot of longterm
employees at this company. Having the
pension plan is definitely a differentiator for
us. Even though it costs more than a typical
DC-style retirement benefit, we feel it's important
to support our employees, because we've
got so many who are long-tenured. "
" 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 (HR), Michael Lulofs. Between the
pension plan and 401(k), he adds, " We like to
see people be able to replace at least 70% of their
income in retirement. "
The 401(k) serves its own strategic
purpose. Sumitomo aims for the pension
plan to provide retired employees with a foundational
benefit, but not to replace their preretirement
income completely.
" The 401(k) is a good way to supplement
that, " Lulofs says. " When you have a pension
plan, there's always the risk that your employee
base will say, 'Well, I don't have to worry about
34 PLANSPONSOR.COM August - September 2020
my retirement because my employer has me
covered.' The 401(k) enables our employees to
have a well-rounded financial plan. "
Recordkeeper Principal Financial Group's
Retirement Wellness Score finds that about
60% of participants in the 401(k) now are on
track to replace 70% or more of their income
when they retire. To help encourage more
participation and higher deferrals, Principal
comes on-site to do group meetings and offers
online tools.
A Personalized Approach
To receive their financial plan, employees get
to meet with, at Sumitomo's expense, one of
Capital Securities' Certified Financial Planners
(CFPs). " We know how expensive it is for
someone to have a plan like this done outside
the company by a financial planner, " Solomon
says. And, for Sumitomo, he adds, " We know
that anytime you've got employees who have
financial struggles, that affects their work negatively
in some way. "
Typically, the adviser visits Sumitomo for a
full day every six months. At the meetings, he
projects for employees what they are on track to
receive in retirement income from their defined
benefit plan, their 401(k) and Social Security,
based on the person working until his Social
Security full retirement age. " We tell them,
'This is where your trajectory is, for the income
you're going to get in retirement, " he says. " Most
of them say, 'Wow, I didn't know I was going to
have that much.' But sometimes they're behind
on their retirement savings: Maybe they joined
Sumitomo later in their career and didn't start
saving until they were in their 40s. "
After the adviser leads them through the
process, employees commonly take action to
increase their deferral, adjust their asset allocation
toward growth equities-if not invested in
the plan's target-date funds (TDFs)-or decide
to work a year or two longer before retiring, he
says. -JW
Finalists
Anvil Corporation
Bellingham, Washington
Health Care Service
Corporation
Chicago, Illinois
Kinder Morgan, Inc.
Houston, Texas
RoyOMartin
Alexandria, Louisiana
More on PLANSPONSOR.com/
awards/2020-plan-sponsor-year
Michael Lulofs, senior director,
human resources, Sumitomo
Machinery Corp. of America
" Most of them
say, 'Wow, I
didn't know I
was going to
have that much.'
But sometimes
they're behind
on their
retirement
savings ... "
http://www.PLANSPONSOR.com/awards/2020-plan-sponsor-year http://www.PLANSPONSOR.com/awards/2020-plan-sponsor-year http://www.PLANSPONSOR.COM
PLANSPONSOR - August/September 2020

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