PLANSPONSOR - July - August 2023 - 40

PLAN PROFILE | A 2018 PLAN SPONSOR OF THE YEAR
Auto-Enrollment Is Still Key
U
nited Hardware Distributing
Co., Inc., is a cooperative distributor
of hardware merchandise
to member stores across the
upper Midwest.
Independent
store
owners join by buying shares in the
organization and, based on their distribution
center purchases, receive a
rebate each year-end. Besides hardware,
the company provides retail
support, education, market resources
and consulting services, addressing
the various particulars of running a
successful hardware store.
Approximately 90 employees
work at the corporate office, in
Maple Grove, Minnesota, and 200 at
the distribution center, in Milbank,
South Dakota.
Asked about its current, higher,
participation rate-94.4%, up from
90.3% in 2018-Cheryl Braun, vice
president of human resources, says,
" We've just stayed the course with
what we feel is our core approach to helping employees save for
retirement: making sure we have auto[matic]-enrollment. I think
we're realizing the benefits of it with turnover we've had, " which
is common in the industry.
United Hardware implemented auto-enrollment-plus
opt-in automatic escalation-back in 2008, setting the default
deferral rate at 3%. After experiencing few opt-outs, the sponsor
raised the rate to 6%, in 2013. " As people are retiring and leaving
the organization, the new ones coming on are automatically set
at a 6% deferral rate, " Braun explains.
The plan curbs leakage by letting participants take a loan
PLAN SNAPSHOT
PLAN SPONSOR: United Hardware Distributing Co., Maple Grove, Minn.
PLAN ASSETS: $21.9 million
PARTICIPANTS: 289
PARTICIPATION RATE: 94.4%
AVERAGE DEFERRAL RATE: 9%
EMPLOYER CONTRIBUTION: 40% of 6% + match of 10% - 45% of 6%
Cheryl Braun, vice president of human resources
account
United Hardware Distributing Co., winner Corporate 401(k) >$10mm - $50mm
only in the case of hardship. " That's
to make clear that the 401(k) is a
retirement-savings
and
not a regular savings account, " she
says. " This is a retirement plan, for
their retirement. By not confining
it to hardship, it can be a little too
tempting for employees to say, 'Oh,
I'll just take a little bit out for this
boat,' or whatever the case is. "
One plan design update since
2018 was that the company added
an in-plan Roth conversion option.
Braun says she thinks most people
are unable to take advantage of that,
but, " it's about giving employees the
tools they need, not just for today
but tools they may want or need as
they continue to prepare for and get
closer to retirement. "
In terms of education, the sponsor's
use of technology evolved during
the pandemic. Prior to COVID-19, all
educational meetings were in person,
making it difficult to educate the distribution center workers.
Employees in this industry were considered essential workers
during COVID. Corporate staff worked remotely, communicating
via Microsoft Teams, but they also found that the program
expanded their ability to educate-via Teams live events. These
get added to all employees' calendars and, moreover, are recorded.
Now, all company employees, including field staff, may attend live
in the corporate office or watch the session at leisure.
About 20% of distribution center employees are Spanish
speaking, Braun says. " We've been trying to find different ways
and avenues to make them feel included and part of the organization,
not off on their own, and provide the necessary education
for them in a way they understand. "
The plan's recordkeeper, The Standard, for instance,
supplies enrollment materials, plus a website platform for the
workers to access, in Spanish. And the sponsor has invested in
simultaneous translation equipment, which allows in-person
educational meetings to be translated, realtime, to earpieces
the Spanish-speaking employees can wear. " We have a human
resources representative who is bilingual and translates along
with the presentations, " Braun says. -Judy Faust Hartnett
40 PLANSPONSOR.COM July - August 2023
Art by Chris Buzelli
http://www.PLANSPONSOR.COM
PLANSPONSOR - July - August 2023

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