PLANSPONSOR - June - July 2022 - 16

BEST PRACTICES | 2022 PLAN SPONSOR OF THE YEAR WINNERS
Public Defined Contribution
City of Milwaukee
Milwaukee, Wisconsin
I
n the first five years after design changes were
made in the City of Milwaukee 457(b) Retirement
Plan, previously underserved employee
populations clearly benefited. Women's participation
in the plan jumped from 66% to 89%,
and their average deferral rate rose from 5%
to 6.3%. Among Black and Latin employees,
respectively, participation grew from 62% to
87% and 69% to 87%; average deferral rates
increased from 4% to 5.6% and from 5.1% to 7%.
The plan's board of trustees voted in
2016 to approve changes to the plan design,
including to add automatic enrollment for new
hires and annual re-enrollment of nonparticipants
and those saving under the 3% default
deferral, unless the employee opted out or was
an active union fire or police employee. The
changes came amid the plan's move, that year,
to Voya Financial as recordkeeper. " That transition
gave us the opportunity to take a fresh look
at things, " says Board Vice Chair James Klajbor.
Design Alterations
Prior to these decisions, plan officials had
heard Ariel Investments Co-CEO and President
Mellody Hobson present about the disparities
in financial health and retirement savings with
respect to race and gender. " That got everybody's
attention, " says Beth Conradson Cleary, executive
director of the plan. " The board took a proactive
look at our demographics and [noticed] gaps
in saving and participation for some groups. "
What makes the sponsor leading-edge
in regard to diversity, equity and inclusion " is
it took the position that there are underserved
groups in the employee population; it worked
with us to get the data on that; it made design
changes to address the situation; and then it
required that we continue to report to its board
on the progress for these different demographic
groups, " says Brian Merrick, a vice president,
relationship manager with Voya.
Conradson Cleary refers to the work done
on the plan in 2016 as " a herculean effort, " but
16 PLANSPONSOR.COM June - July 2022
one that soon demonstrated a positive impact.
" Everything started to shift, once we had those
best practices in place, " she says.
The plan now has an 89% overall participation
rate, so there is room for some improvement,
the sponsor recognizes. As city employees
participate in an active defined benefit plan,
some balk at saving more. " We tell them, 'If you
contribute to the 457 plan, you might have a bit
of pain now, but you'll save yourself a lot of pain
later, if you can retire on time and have a nice
retirement,' " says Klajbor.
One-on-One Meeting 'Magic'
Voya had been conducting group and individual
meetings virtually for two years, but in
April the city moved to a hybrid model. Zoom
and telephone meetings continue, but city
employees now may have in-person consultations
twice a week.
The city also tracks 457(b) plan participation
by employees who have engaged with Voya's
financial wellness program, through one-on-one
consultations or group seminars, and it studies
how participation and deferral rates compare
with those of employees who did not engage.
Data for 2020, the most recent, show that
women who engaged with the program have a
94% 457(b) participation rate and 8.5% average
deferral, vs. a 66% participation rate and 4.3%
average deferrals for women who did not engage.
Black employees who engaged have a 94%
participation rate and 7.8% average deferral, vs.
70% participation and 4.1% average deferral for
those who did not engage. Latino employees
who engaged have a 95%, vs. 73%, participation
rate, and an 8.1% , vs. 5.7%, average deferral.
Conradson Cleary primarily attributes the
difference to the one-on-ones. " These sessions,
where individual needs, goals and questions
can be reviewed and addressed, are where the
magic really happens in terms of participation
and contribution levels, the two data points we
benchmark against, " she says. -Judy Ward
Finalists
Douglas County Colorado
Castle Rock, Colorado
New York City Deferred
Compensation Plan
New York, New York
University of Kentucky
Lexington, Kentucky
More on PLANSPONSOR.com/
awards/2022-plan-sponsor-year
Beth Conradson Cleary,
Executive Director
" Everything
started to
shift, once
we had
those best
practices
in place. "
http://www.PLANSPONSOR.com/awards/2022-plan-sponsor-year http://www.PLANSPONSOR.com/awards/2022-plan-sponsor-year http://www.PLANSPONSOR.COM
PLANSPONSOR - June - July 2022

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