PLANSPONSOR - July - August 2023 - 20

AWARDS | 2023 PLAN SPONSOR OF THE YEAR WINNERS
Public Defined Contribution
Tennessee Department of Treasury
Nashville, Tennessee
identify those for whom it's not working and
seek them out to help them. "
Helping
high-need
participants
started
Hunter Bethea, director of deferred compensation
Plan Snapshot
PLAN TYPE AND SIZE: 401(k), 457(b), defined benefit
plan; $4.8b for 401(k)
PARTICIPANTS AND PARTICIPATION RATE: 196,000; 74%
DEFERRAL RATE: 2% default; 4% average
EMPLOYER CONTRIBUTION: 200% match, up to $100
each month, for state and higher education 401(k)
participants; 5% nonelective contribution for hybrid
401(k)/defined benefit participants
SINCE 2021 when the Tennessee Department
of Treasury launched a targeted program to reach
high-need participants in its RetireReadyTN
401(k) plan for public employees, the plan has
been able to classify 20% fewer high-need
participants as being at equity or inflation
risk. And the median lifetime income score-
the percentage of pre-retirement income that
a participant is on track to replace-rose from
62% to 65% between 2021 and 2022.
" The purpose of our plan is to enable everybody
who's eligible to be retirement ready, " says
Hunter Bethea, director of deferred compensation
at the Tennessee Department of Treasury,
in Nashville, Tennessee. " We want the plan
to work for everyone. So we want to be able to
20 PLANSPONSOR.COM July - August 2023
with defining and identifying who fit into that
category. RetireReadyTN officials defined it as:
participants with a projected lifetime income
score below 70%; automatically enrolled nonparticipants
who opted out; and participants at
equity or inflation risk. Those at equity or inflation
risk were participants 50 and older with 75%
or more of their assets in equities; participants
under 50 with less than 25% in equities; and
participants over 50 with less than 10% of their
portfolio in equities. An analysis revealed that
64% of do-it-yourself investors in the plan fell
into the equity risk or inflation risk categories.
The plan sponsor did targeted messaging to
encourage employees in those high-need groups
to meet, either virtually or in-person, with a
RetireReadyTN plan adviser; the advisers are
employees of the plan's recordkeeper, Empower
Retirement, who focus solely on working with
the Tennessee system.
According to Ashley Nabors, assistant treasurer
of the department's financial empowerment
division, " The targeted messages were
personalized to each high-need participant's
situation, were conversational in tone and made
it easy to schedule a meeting with one click of
a button. We wanted each participant receiving
the messages to see the ease of meeting with
a RetireReadyTN plan adviser who lives in or
near their community-and the great benefit to
doing so, at no additional cost. "
Any state worker or teacher may meet individually
with one of these advisers and receive a
retirement readiness review. The review assesses
the person's projected retirement income from
all available sources, including state pension
benefits provided by the Tennessee Consolidated
Retirement System-all employees
receive a
defined benefit, with the accounts of those hired
after 2014, and enrolled in the state's hybrid plan,
dominated by the 401(k)-and outside accounts.
-Judy Ward
Finalist
Massachusetts Office of
the Treasurer and Receiver
General
Boston, Massachusetts
More on PLANSPONSOR.com/
awards/2023psoy
" We want the
plan to work
for everyone.
So we want
to be able to
identify those
for whom it's
not working
and seek
them out to
help them. "
http://www.PLANSPONSOR.com/awards/2023psoy http://www.PLANSPONSOR.com/awards/2023psoy http://www.PLANSPONSOR.COM
PLANSPONSOR - July - August 2023

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