The Best Practices of The Principal 10 Best Companies for Employee Financial Security

The Principal 10 Best Companies for Employee Financial Security—2005 represent the finest in employee benefits offered by small and medium-sized employers. The best practices of these impressive organizations may help your business overcome the challenges – and reap the rewards – of helping secure employees’ financial futures.

Best practices in health care benefits

Creating a comprehensive wellness program. Glatfelter Insurance Group’s wellness program includes a fitness center, an on-site trainer, free physicals, screenings for strokes and aneurisms, weight management programs and wellness fairs. “I really believe our wellness benefits make a difference,” says Sandra J. Brown, the company’s vice president of human resources. “It has paid off not just in health care dollars, but also in the culture and the overall loyalty of employees. They know we care.”
Implementing a health savings account (HSA). HSAs are high-deductible, account-based health care plans that allow employees to set aside money for health care expenses on a tax-favored basis. Two of this year’s 10 Best Companies plan to implement HSAs next year; several others are researching the option. “I’m a big fan of HSAs,” says Nick Brown, president of Southwest Power Pool. “If you make employees better health care consumers, you’ll see benefits as far as utilization.”
Making education a top priority. If your company is considering an HSA in the near future, start now on your employee education plan. Because HSAs differ greatly from traditional medical plans, the learning curve will be long. “Education will be a critical focus for us at Glatfelter,” says Sandra Brown. “We will have an extremely extensive education plan in place before we roll the HSA out.”
Providing free preventive care. Simple and relatively inexpensive preventive care – including flu shots and standard blood tests – can prevent more costly health care expenses down the road. “I think it makes a difference,” says Flexible Steel Lacing Company’s human resources manager, Krista Howland, of their wellness screenings, which are free to employees, spouses and retirees.
Offering different medical plans to meet employees’ varying needs. “There are several plan options employees can select in accordance with their medical insurance use,” says Susan Cutter, vice president at American Lung Association. “I think designing our plans that way has helped to control our expenses.”
Rewarding employees for exercising. A little incentive can go a long way. That’s why Flexible Steel Lacing Company gives free gift certificates from local sporting goods stores to employees who exercise on a regular basis.

Best practices in retirement benefits

Making saving – and saving more – automatic. Campus USA Credit Union plans to add “auto pilot” features like automatic enrollment and automatic deferral to their 401(k) plan within the next year. “After researching it and attending seminars on the subject, we’re going to do it,” says Jill Harper, Campus USA Credit Union’s vice president of human resources. “Our main goal is to increase average deferrals. But we also learned that most people don’t opt out of automatic enrollment, so we should be able to increase participation, as well.”
Including lifecycle funds in the investment lineup. Lifecycle funds (also referred to as lifestyle funds) help take the worry out of managing 401(k) investments. Employees select a fund based on their retirement date. Each fund consists of a full investment portfolio and is professionally managed based on a specific retirement year. As employees near retirement, the portfolio automatically becomes more conservative. “There’s been a strong interest in our lifestyle funds because they take the guesswork away,” says Sandra Brown of Glatfelter Insurance Group.
Adding annuities as retirement plan payout options. Virtually all pension plans offer an annuity payout option. Many of this year’s 10 Best Companies also offer annuity payout options for their defined contribution plans. “We think annuities are very important and underused,” says Joanne Daly, senior vice president of administration at American Council of Life Insurers (ACLI).
Sponsoring age-specific retirement planning classes. “There are a lot of different things to consider based on how far away employees are from retirement,” Flexco’s Howland explains. “That’s why we offered one class for employees with less than 10 years until retirement and another for those with more than 10 years until retirement. Plus, I think employees felt more comfortable asking questions within those groups because everyone was in the same boat.”
Offering incentives for even small 401(k) deferral increases. The Washington Trust Company, which boasts an average 401(k) deferral rate of 8 percent, issues a “1% Challenge” to employees each quarter. When employees increase deferrals to the company’s 401(k) plan by at least 1 percent, they receive a free gift such as a t-shirt or pre-paid calling card. “It always amazes me how many people take the challenge and increase their deferrals,” says Kristen DiSanto, vice president of human resources for The Washington Trust Company. “The results are tremendous.”

Best practices in employee communication and education

Bringing in a financial advisor. Southwest Power Pool uses a registered investment advisor to help educate and guide employees on retirement issues. “Bringing that advisor on helps us meet our fiduciary responsibility and helps our employees get one-on-one advice,” says President and CEO Nick Brown.
Sponsoring “lunch and learns.” If finding time for benefits education is a challenge, hold “lunch and learn” gatherings. The company can provide lunch or employees can bring their own lunches. “The lunch and learn programs we hold are extremely helpful,” says Sandra Brown of Glatfelter Insurance Group.
Getting creative when communicating with off-site employees. Only 65 of Moran Towing’s 800-plus employees are in the corporate office. The rest are spread across the United States and the world, and many are out on the company’s boats for two weeks at a time. “We have to be very creative about educating our employees,” explains Jeff McAulay, the company’s vice president of finance and administration. “We use web conferences, we put videos on the tugs so employees can watch them while they’re out on the boats and we mail things to their homes. We try to reach people as best we can.”
Making meetings fun. Something as simple as a contest can help boost attendance at benefits meetings. “We do different fun games and contests,” says Harper at Campus USA Credit Union. “They can win days off and other prizes. We definitely get higher attendance at those meetings.”
Planning ahead. ACLI recently changed from a defined benefit pension plan to a cash balance pension plan. The transition was very smooth, thanks in large part to the company’s thorough communication plan. “We spent more than a year educating employees on the change. We introduced it first in a broad context, then in more focused ways, then in individual ways. It was a hand-holding process right from the start,” says ACLI’s Daly.
Using a combination of communication tools. Employees have different preferences when it comes to learning. That’s why this year’s 10 Best Companies use a variety of communication methods, including e-mails, mailings to employees’ homes, newsletters and more. “I think the combination of different means of communication gets us better overall coverage,” explains The Washington Trust Company’s DiSanto.
Showing employees the big picture. “We give employees a pie chart of the total cost of the benefit package. When they see how many millions of dollars this company spends on employee benefits, they’re amazed,” explains John Roberts, senior vice president of human resources at GuideOne Insurance.
Creating personalized benefit statements. Moran Towing is among several 10 Best Companies to use this tool, which shows each employee the cost of the specific benefits he or she receives. “We find that helpful in a lot of different ways. It allows employees to see types of benefits they’re receiving. It shows how much the benefits cost and helps employees appreciate the cost,” says McAulay of Moran Towing.