Evaluating Workplace Evaluating Workplace Education for New Hires Education for New Hires Robert L. Clark Robert L. Clark Melinda Sandler Morrill Melinda Sandler Morrill North Carolina State University North Carolina State University North Carolina State University North Carolina State University
Overview Overview Overview Overview • This project documents participation and This project documents participation and contribution rates of newly hired workers in optional retirement savings programs optional retirement savings programs. • Goal: to determine how information and plan G l d i h i f i d l structure affects participation.
Overview: Year One Overview: Year One Overview: Year One Overview: Year One • Partnered with six large national employers Partnered with six large, national employers. • Reviewed plan structure and current information provision. information provision • Gathered data on plan participation for workers hired in 2008 and 2009 at each k hi d i 2008 d 2009 h employer.
Employer Partners: BB&T Employer Partners: BB&T Employer Partners: BB&T Employer Partners: BB&T • Plan Type: – Eligible on 1 st day of employment. – Optional defined contribution – Supplements the DB plan S l h DB l • Match: – Qualify: 1,000 hours and 1 year of service – 100% on first 6% • Information: – Benefits discussed at orientation and annual review.
Employer Partners: Progress Energy Employer Partners: Progress Energy Employer Partners: Progress Energy Employer Partners: Progress Energy • Plan Type: Plan Type: – Eligible on 1 st day of employment. – Optional defined contribution p – Supplements the DB plan • Match: Match: – Qualify: 1 st day of employment – 100% on first 6% • Information: – Orientation only. Orientation only.
Employer Partners: Pepsi Bottling Employer Partners: Pepsi Bottling Ventures, LLC Ventures, LLC • Plan Type: yp – Auto ‐ enroll – Eligible after 60 days of employment. – Optional defined contribution O ti l d fi d t ib ti – Only retirement savings plan (no DB plan) • Match: Match: – Qualify: 1,000 hours and 1 year of service – 100% on first 4%, 50% on next 2% • Information: – Orientation only.
Employer Partners: Martin Marietta Employer Partners: Martin Marietta Materials Materials l l • Plan Type: yp – Auto ‐ enroll – Eligible on 1 st day of employment. – Optional defined contribution O ti l d fi d t ib ti – Supplements the DB plan • Match: Match: – Qualify: 6 months of service – 50% on first 7% • Information: – At orientation, annually sends plan information.
Employer Partners: North Carolina Employer Partners: North Carolina State University State University • Plan Type: Plan Type: – Eligible on 1 st day of employment. – Optional defined contribution 401(k), 403(b), 457 Optional defined contribution 401(k) 403(b) 457 – Supplements the DB plan • No Match N M t h • Information: – At orientation, emails sent annually by provider, optional workshops.
Employer Partners: Williams Employer Partners: Williams Employer Partners: Williams Employer Partners: Williams • Plan Type: a ype: – Eligible on 1 st day of employment. – Optional defined contribution – Supplements the DB plan • Match: – Eligible on 1 st day of employment – 100% on first 6% • Information: f i – At orientation, email reminders sent by staff (ad ‐ hoc), emails sent by plan provider emails sent by plan provider.
Background on Employer Background on Employer Background on Employer Partners Background on Employer ‐ Partners Partners Partners • Two employers have opt ‐ out plans Two employers have opt out plans. • All but one offer an employer match. – Variation in amount of match and in service V i ti i t f t h d i i requirements to qualify for match. • All but one have a DB plan in addition to the All b t h DB l i dditi t th DC plan.
Preliminary Data Preliminary Data Preliminary Data Preliminary Data • Administrative data on approx 10K individuals Administrative data on approx. 10K individuals hired in 2008 and 2009 and currently employed in Summer 2010 employed in Summer 2010. • All employers: – Date of hire, gender, date of birth, current D t f hi d d t f bi th t participation level. • Additional information: Additi l i f ti – Salary, date contributions began, job classification
Preliminary Findings from Year 1 Preliminary Findings from Year 1 Preliminary Findings from Year 1 Preliminary Findings from Year 1 • Research Finding 1: The employers provide Research Finding 1: The employers provide extensive information at orientation, but further efforts to reach workers are mostly ad ‐ further efforts to reach workers are mostly ad hoc.
Preliminary Findings from Year 1 Preliminary Findings from Year 1 Preliminary Findings from Year 1 Preliminary Findings from Year 1 • Research Finding 2: Employees are Research Finding 2: Employees are responsive to match incentives.
Williams: Deferral Percentages for 2009 New Hires Williams: Deferral Percentages 100 98 for Individuals Hired in 2009 as of May 28, 2010 of May 28, 2010 0 80 (6% match) requency 60 F 40 18 20 14 9 7 6 5 4 4 1 0 0 2 4 6 8 10 401k Deferral Progress Energy: Deferral Percentages for 2009 New Hires 87 80 0 Progress Energy: Deferral Percentages for Individuals 60 Hired in 2009 as of July 6, 2010. ncy Freque (6% match) 40 19 20 8 8 7 7 6 4 3 3 3 3 2 2 2 2 1 1 1 1 1 0 0 5 10 15 20 25 401k Deferral
Preliminary Findings from Year 1 Preliminary Findings from Year 1 Preliminary Findings from Year 1 Preliminary Findings from Year 1 • Research Finding 3: The date when the Research Finding 3: The date when the employer match begins should be an important “teachable moment” for employers important teachable moment for employers to reach out to employees
BB&T: Time until Sign-up s Participating BB&T: Time until Sign ‐ up for 40% Individuals Hired in 2008 & 2009. 08/2009 New Hires (match begins after 1 year) 30% 20% Percentage of 200 10% 0 P 90 90 90 90 365 365 Number of days between date of hire and date of participation Percent of 2008 Hires (Cumulative) Percent of 2009 Hires (Cumulative) Williams: Time until Sign-up icipating 80% 09 New Hires Part 60% WLM: Time until Sign ‐ up for 40% Individuals Hired in 2008 & 2009 Individuals Hired in 2008 & 2009. rcent of 2008/200 (match begins immediately) 20% Per 30 90 365 Number of days between date of hire and date of participation Percent of2008 Hires (Cumulative) Percent of2009 Hires (Cumulative)
Preliminary Findings from Year 1 Preliminary Findings from Year 1 Preliminary Findings from Year 1 Preliminary Findings from Year 1 • Research Finding 4 : Auto ‐ enroll programs Research Finding 4 : Auto enroll programs increase retirement savings plan participation considerably considerably. Percent of Employees Participating as of Summer 2010 by Year of Hire 96 1% 96.1% 94.1% 100% 91.9% 91.7% 90% 76.3% 80% 70.1% 70% 61.2% 60% 52.6% 52.1% 50% 50% 40% 32.0% 30% 14.3% 20% 6.9% 10% 0% NCSU BB&T PGN WLM MMM PBV Average Plan Participation: 2008 New Hires Average Plan Participation: 2009 New Hires
Preliminary Findings from Year 1 Preliminary Findings from Year 1 Preliminary Findings from Year 1 Preliminary Findings from Year 1 • Research Finding 5: There is little decay in Research Finding 5: There is little decay in participation rates over time for employers using auto ‐ enrollment using auto enrollment.
MMM: % Participating in Summer 2010 by Quarter Hired rticipating 1 009 New Hires Pa .8 .6 entage of 2008/20 .4 .2 Perce 0 2008 Q1 2008 Q2 2008 Q3 2008 Q4 2009 Q1 2009 Q2 2009 Q3 2009 Q4 PBV: % Participating in Summer 2010 by Quarter Hired ing 1 ew Hires Participati .8 e of 2008/2009 Ne 6 .6 .4 Percentage .2 0 2008 Q1 2008 Q2 2008 Q3 2008 Q4 2009 Q1 2009 Q2 2009 Q3 2009 Q4
Preliminary Findings from Year 1 Preliminary Findings from Year 1 Preliminary Findings from Year 1 Preliminary Findings from Year 1 • Research Finding 6: There is evidence that Research Finding 6: There is evidence that persons automatically enrolled in supplemental plans have lower contribution supplemental plans have lower contribution rates that are concentrated at the default level level.
2008 New Hire Deferral Percentage (as of July 3, 2010) 108 100 80 requency Martin Marietta Materials: 60 Deferral Percentages Deferral Percentages Fr Auto ‐ enroll at 2% and 40 increases annually by 1% 24 20 13 9 6 6 5 5 2 2 1 0 0 2 4 6 8 10 401k Deferral 2009 New Hire Deferral Percentage as of (July 3, 2010) 0 60 58 58 40 40 cy Frequenc 20 9 7 5 3 3 0 2 4 6 8 10 401k Deferral
Average Deferral Percentages for 2008 New Hires, as of Summer 2010 as of Summer 2010 Auto ‐ Enroll Opt ‐ In p MMM PBV BB&T PGN WLM Participation Rate 94.1% 91.7% 52.1% 70.1% 76.3% Average Deferral Percentage for Active 4.36% 3.83% 6.35% 8.16% 6.54% P Participants ti i t Average Deferral Percentage (including 4.11% 3.51% 3.29% 5.72% 5.04% zeros) zeros).
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