PLANSPONSOR - August - September 2022 - 40

PLAN PROFILE
A Balanced Plan
I
n 2018, 23andMe, Inc., a consumer
genetics
and
therapeutics
company, made a decision
to double down on its 401(k) plan to
ensure employees every opportunity
to secure a comfortable future. The
company put out requests for proposals
to change both recordkeeping and
advisory services and chose Fidelity
Retirement and Strategic Retirement
Partners, respectively.
Charene Angulo,
payroll
and
retirement plan manager-plus selfproclaimed
" 401(k) nerd " -says of the
RFP process, " From day one, the new
provider mandate from the 23andMe
team has been clear: How do we make
this plan rock for our participants? "
As a 2006 Silicon Valley startup,
23andMe is past the fledgling phase.
It is now publicly traded and, last
November, expanded into telehealth
and
pharmacy
services
with
the
This sponsor builds a high-quality plan despite a limited budget
board with Fidelity and SRP, " Angulo
says. Then,
" the participation rate
increased from approximately 85% to
the 93% rate it is today. "
The investment menu employs
the principles of " choice architecture, "
meaning, she says, there are enough
choices to satisfy, but not so many that
they confuse or overwhelm. And it
offers a mix of actively and passively
managed funds, all of which are institutionally
priced and cost-efficient,
says Stig Nybo, an SRP plan strategist.
" Transparency became an immeacquisition
of Lemonaid Health, an
on-demand platform for accessing
medical care and medication online.
Operating three complex business units puts constraints
Charene Angulo, payroll and retirement plan
manager, 23andMe
diate mandate [from the employer], "
he says. This required that " a heavy
dose of indexing " be incorporated
into the plan " so people have access to
very inexpensive investment options.
In addition, all advisory and recordkeeping
fees are stripped out for the
participant, to limit their impact on
returns, " Nybo says.
For a further upgrade, the
company diversified employee contrion
funds available for matching contributions, Angulo says.
Recognizing these limitations, the team decided to focus on plan
design fundamentals to enhance the plan's offerings.
The plan had been designed with a 6% automatic enrollment
and 2% annual escalations to a maximum deferral of
14%-coupled with a default into institutionally priced targetdate
funds. " We didn't have automatic features until we came on
SNAPSHOT
PLAN SPONSOR: 23andMe, Inc., Sunnyvale, California
KEY PLAYER: Charene Angulo, payroll and retirement plan manager
NUMBER OF PARTICIPANTS: 1,036; TOTAL PLAN ASSETS: $74,251mm
PARTICIPATION RATE: 93%; AVERAGE DEFERRAL RATE: 11.8%
EMPLOYER CONTRIBUTION: Greater of 100% of 2% or 100% of first $2,300
bution opportunities beyond just pre-tax, Angulo says. It added a
Roth 401(k) in 2016 and an after-tax option in 2020.
23andMe does offer a match-one that specifically targets
the company's lower-wage earners. It was decided that, as the
plan uses both auto-enrollment and auto-escalation, to add more
participants was not the match's purpose. Rather, it was to help
those with smaller earnings save more. The match has recently
been modified to 2% of whatever the employee saves over the
year, or $2,300, whichever is more.
The company's employee engagement strategy consists of
quarterly webinars, plus periodic custom group presentations
and one-on-one consultations, both the latter of which supplied
by SRP. SRP and Fidelity recently held a joint meeting for participants,
to discuss market volatility, and on the closing slide was
a QR code. The idea was, as employees engaged in the meeting
and thought " You should talk to these folks, " they could immediately
schedule a time with SRP, Angulo says.
As Nybo sums up, " 23andMe has shaken off the sometimesseen
complacency of Silicon Valley firms concerning their 401(k)
plans. It really focuses on its plan. " -Judy Faust Hartnett
40 PLANSPONSOR.COM August - September 2022
Art by Chris Buzelli
http://www.PLANSPONSOR.COM
PLANSPONSOR - August - September 2022

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