Case Studies

Plan Design Examples:

HJ Heinz: Implemented Auto Enrollment as Phased Out Defined Benefit
JC Penney Co. Inc: Impact of Implementing Auto-Enrollment
McDonald’s: Increase Participation Among Targeted Ethnic Groups

Engagement Strategies Examples:

Ball Horticultural Co.: Diverse Employee Base Requires Broad Appeal
BEI Electronics: Easy Enrollment at New Employee Orientation
City of Baltimore: Using Testimonials to Reach Target Groups
Denny’s Corp: Diverse Employee Base and Language Barriers
Electronic Arts Inc.: Personalized Mailings and Interactive Material
Evangelical Lutheran Church of America (ELCA): Personalized Direct Mail Campaign
Hyatt Corp.: Branded Campaign, New Company Match, Giveaways
Larson Juhl US LLC: Engaging Employees in Envisioning their Retirement
Multi-Tech Systems: In-Person Meetings and Cultural Sensitivity
Phelps Dodge Inc.: Increasing Participation Among Younger Employees
Williams Sonoma: Easy Enrollment and Incentives to Recruit Participants

Plan Design Examples

HJ Heinz: Implemented Auto Enrollment as They Phased Out Defined Benefit
Heinz has had an automatic enrollment policy since 1992. The food products maker automatically enrolls all new hires in their 401(k) plan at three percent of their salary, matching it dollar for dollar and investing it in an array of mutual funds.

Workers who actively enroll in a 401(k) choose from a wide range of mutual funds, each with varying degrees of risks. Once enrolled, employees have the option of increasing their contribution and changing their investment distribution. Heinz's employees can call the company's toll-free benefits center 800 number to cancel their enrollment, but few have.

JC Penney Co. Inc: Impact of Implementing Auto-Enrollment
Participation in the 401(k) plan at J.C Penney Co. Inc. jumped to 89 percent of 257,000 employees from somewhere in the low 70's, when the national department store retailer launched its automatic enrollment plan.

McDonald’s: Increase Participation Among Targeted Ethnic Groups
To increase employee participation in its retirement savings plan and to address identified variation by ethnic groups, McDonald’s made some significant changes to its plan design.

Targeting their most under-invested group of employees, restaurant managers, McDonald’s implemented automatic enrollment at one percent of salary for restaurant managers as well as a one-time one percent salary increase to offset the impact to their take-home pay.

In addition, the company gave employees $3 for every $1 they contributed on the first one percent of their pay and $1 for each $1 they contributed on the next four percent of their pay.

This employer match is equivalent to seven percent on the first five percent employees save. McDonald’s communicated the new program to employees via frequent employee newsletters and seminars. Their campaign also reached out to employee diversity groups.

Results: McDonald’s increased employee participation among African-American restaurant managers from 50 percent in 2004 to 95 percent in 2007.

The percentage increase in minorities overall participating in the plan was more than double that of non-minorities (24 percent increase for minorities, 11 percent increase for non-minorities). At 89 percent, the percentage of African-American employees now participating in McDonald’s retirement savings is nearly equal to that of non-minority employees.

Engagement Strategies Examples

Ball Horticultural Co.: Diverse Employee Base Requires Broad Appeal
The company’s 5,000 employees range from biochemists to Spanish-speaking seed sorters. The campaign used simple, but gorgeous photos of flowers to associate with the company and create a relaxing, inviting mood.

BEI Electronics: Easy Enrollment at New Employee Orientation
New employees are given a simple form and asked to circle either: ''yes'' or ''no'' to participation in the plan, and “1 to 15” for the percentage of contribution. Over the last four years, enrollment has increased to 93 percent from 77 percent.

City of Baltimore: Using Testimonials to Reach Target Groups
The City of Baltimore used photos and quotes of employees. Testimonials from seven employees, all well known in their union groups, were thoughtful and laced with classic investment education topics.

Denny’s Corp: Diverse Employee Base and Language Barriers
Materials were presented in both Spanish and English. The plate and menu motif was inviting and the materials were easy to read. Employees were invited to call or visit the Website for more information. In two months the plan received more than 2,000 phone calls and 500 Web hits.

Electronic Arts Inc.: Personalized Mailings and Interactive Material
Personalized mailings with bold graphics to appeal to its young, hip, artistic and tech-savvy employees were a winning combination for this developer and publisher of interactive game software. The participation rate grew to more than 65 percent from 51 percent prior to the mailings. Plus, 18.5 percent of participants increased their deferral rates.

Evangelical Lutheran Church of America (ELCA): Personalized Direct Mail Campaign
Personalized statement targeted to employees who aren’t participating in the company 401(k) plan. The material included personalized data regarding eligibility for employer match and the total annual combined (employer and employee) savings at a variety of contribution levels. The information also visually modeled account growth over 10 years at two contribution levels.

Hyatt Corp.: Branded Campaign, New Company Match, Giveaways
Mykey (pronounced “Mikey”) is a lively and colorful cartoon version of a hotel room key card and is the new mascot for Hyatt's retirement savings plan. He's featured on posters and is pictured on free T-shirts that promote the new company match. In six months, the participation rate rose nine percent.

Larson Juhl US LLC: Engaging Employees in Envisioning their Retirement
“What does your retirement look like?” a contest sponsored by their employer. They described their vision of a typical day during retirement, what activities they intend to pursue and how their lives would be different. The winner got $500 and was featured in the new investment education program.

Multi-Tech Systems (MTS): In-Person Meetings and Cultural Sensitivity
Most of the 250 employees are low-wage workers representing minority groups including Vietnamese, Hmong and Korean ethnicities. By implementing an annual in-person campaign, MTS was able to increase 401(k) participation from about 40 percent to 72 percent over a three-year period.

MTS encouraged employees to attend a meeting with the offer of gifts, food and prizes. At the meeting, they provided clear, easy to understand information about why it makes sense to contribute to retirement savings.

Employees were encouraged to complete a simple enrollment form at the meeting. Cultural and language barriers were addressed with bilingual staff members who served as trusted resources both at the meeting and outside of the meeting. All were well-regarded members of the various cultural sub-groups.

Phelps Dodge Inc.: Increasing Participation Among Younger Employees
To target the company’s average non-participant, a young male, Dodge employed a baseball-themed campaign timed with Major League Baseball season. Using company colors, mailers were sent in the form of tickets, programs, a pack of baseball cards (with investment info.) and a bag of Cracker Jacks. About 20 percent of targeted employees began contributing.

Williams Sonoma: Easy Enrollment and Incentives to Recruit Participants
Store managers were asked to implement the First You, Then Two campaign: to consider the 401(k) plan themselves and then present it to two other employees. Managers were given easy enrollment forms to distribute. Employees merely had to check three boxes and sign forms that already had their names, employee numbers and store numbers on them. Managers who returned at least 80 percent of the forms were entered in a drawing for an iPod.