PLANSPONSOR - December/January 2021 - 40

PLAN PROFILE
Making Its QDIA Personal
F
This sponsor's default investment is now managed accounts
irst PREMIER Bank is the 12th
largest financial institution in
the U.S. that originated from
Automated Clearing House (ACH), and
PREMIER Bankcard the nation's 12th
largest issuer of Mastercard credit cards.
Between the two entities, PREMIER
employs more than 2,300 workers over
its 20 sites, all in South Dakota. Many
have celebrated 25, 30 or 40 years working
for the institution.
By the time Colleen Stratton, assistant
vice president of Total Rewards for
First PREMIER Bank and PREMIER
Bankcard was hired in 2015, retirement
plan and benefits enhancements had
already begun to ramp up, according
to the company's adviser, Brad Arends,
CEO of intellicents in Albert Lea,
Minnesota. " In about 2010, PREMIER
began making plan design changes
predicated on looking at the data behind
the percentage of participants who were
agreed to an increase in the automatic
enrollment initial deferral from 3% to
5% for all new hires.
Stratton says Arends has been very
Colleen Stratton, assistant vice president,
Total Rewards
retirement ready, defined by their ability to live at the same standard
of living in retirement that they live in currently, " Arends
says. Just 17% of participants met this standard at that time.
By 2013, the plan had become safe harbor, adopting a 100%
of up to 5% employer match. Prior to 2013, the match had been
100% on the first 2% and 200% on the next 1%. Currently, 85%
of participants contribute at least enough to receive the full
match. After Stratton came on board, the executive committee
SNAPSHOT
PLAN SPONSOR: First PREMIER Bank and PREMIER Bankcard,
Sioux Falls, South Dakota
KEY PLAYER: Colleen Stratton, assistant vice president of Total
Rewards
NUMBER OF PARTICIPANTS: 2,364
PLAN: 401(k)
TOTAL PLAN ASSETS: $187,980,673
AVERAGE DEFERRAL RATE: 8%
PARTICIPATION RATE: 92%
EMPLOYER CONTRIBUTION: 100% of up to 5%
proactive about how the company can
enhance its plan. Working closely with
intellicents, PREMIER began offering
employees more educational programs
and one-on-one advice sessions. As
now, topics included the 401(k) plan and
retirement readiness, Social Security,
and the high-deductible health plan
(HDHP) plus health savings accounts
(HSAs), among others. The company
contributes to the HDHP/HSA plan
annually: $1,000 for a single plan and
$2,000 for an employee-plus. Currently,
36% of employees have a balance of over
$2,000 in their HSA, allowing them to
participate in the investment benefit.
By the end of 2019, the company's
aggregate retirement readiness score
had risen to 53%.
After being with the same recordkeeper for over 10 years, in
2018, PREMIER decided to examine what services-specifically
in the area of technology-a different recordkeeper might offer.
This October, 18 months after starting the request for
proposals (RFP) process, PREMIER moved its plan to Empower.
The institution also then moved to intellicents-branded " bioni(k)
managed accounts " as its qualified default investment alternative
(QDIA). Stratton says, " As we looked at our workforce and what
we could do to help get them ready for retirement, the executive
team unanimously said, 'Yes, we're going to offer these managed
accounts, plus we'll pay all the fees.' That's the PREMIER way. "
The company automatically enrolled each participant into
a managed account, on an opt-out basis, prior to the conversion
to Empower. Out of 2,100 participants, only 14 rejected the
option. The 99%-plus who did not now have the advantage of
personalizing their holdings.
PREMIER pays 100% of the managed account fees. " That
had an impact on the number of participants that stuck with it, "
Arends notes. " Between Morningstar's and Empower's fees, it was
22 basis points [bps]. Managed accounts fees had been 60 to 100
basis points. They've really come down. " -Judy Faust Hartnett
40 PLANSPONSOR.COM December 2020 - January 2021 Art by Chris Buzelli
http://www.PLANSPONSOR.COM
PLANSPONSOR - December/January 2021

Table of Contents for the Digital Edition of PLANSPONSOR - December/January 2021
