Best Practices Highlights of The Principal 10 Best Companies For Employee Financial Security—2006

The Principal 10 Best Companies for Employee Financial Security—2006 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 Retirement Benefits

Help older employees transition to retirement. Many of The Principal 10 Best Companies—2006 offer seminars and other special training for soon-to-be retirees. Central Iowa Power Cooperative (CIPCO), for example, sends employees age 50 and older to an off-site retirement planning seminar once per year.

Include lifecycle funds in your investment lineup. Ninety percent of this year’s winners offer lifecycle funds to participants. “When we show employees the diversification and how the funds will be managed by professionals as opposed to the individual, it makes them much more comfortable,” explains Wayne Wood, president, Michigan Farm Bureau.

Offer one-on one help. Whether it’s with an outside financial advisor or a member of their human resources staff, all of this year’s winners rely heavily on one-on-one conversations to educate and engage employees about retirement planning. “We talk directly with employees who aren’t contributing,” says says Debbie Jaudon, human resources director at Argon ST.

“Raise” the issue at raise time. Timing is everything, especially when it comes to increasing retirement plan deferrals. “Every year at merit increases, we encourage employees to contribute more to the 401(k),” says Susan McBride, PHR, senior manager of human resources for Eastern Financial Florida Credit Union.

Make it automatic. West Bend Mutual Insurance Company credits their automatic enrollment policy for the company’s impressive 96 percent participation rate. The practice is expected to become even more widespread now that the Pension Protection Act of 2006 has paved the way.

Tell employees exactly how much they’re missing. “We show employees the impact of increasing their deferrals by one or two percent,” explains benefits and compensation manager, Michigan Farm Bureau. “We also show those who don’t participate in the plan what they’re giving up, and we show individuals who aren’t contributing enough to get the full match what they’re throwing away.”

Contact employees individually about diversification. “At least twice each year, we send targeted emails to people who we feel are not diversified enough in their 401(k) plan. We explain the benefits of diversification and encourage them to diversify,” says Debbie Jaudon, human resources director at Argon ST.

Best Practices in Health Care Benefits

Implement a wellness program. Make sure to conduct initial health screenings to develop a baseline for metrics like cholesterol, blood pressure and weight. Howalt-McDowell took this approach and can now evaluate the program’s effectiveness by tracking the data. The initial screening also caught potentially serious health problems in several employees.

Focus on preventive care. Small problems caught now can prevent big expenses down the road. “An important component of our wellness program is 100 percent coverage for any type of preventive medical procedures,” says Becky Padgett, chief people officer at Wells Real Estate Funds.

Reward employees for healthy behaviors. A little incentive never hurts, especially when you’re asking employees to change their habits. Employees at Howalt-McDowell are entered into a drawing for a treadmill if they walk 25 minutes a day. McNaughton & Gunn pays employees $50 if they quit smoking.

Offer weight loss and smoking cessation classes. Making these classes available on-site is a great convenience for employees and can really pay off in terms of their overall health. GTE Federal Credit Union, for example, offers Weight Watchers classes at a discounted rate.

Implement a disease management program. Wells Real Estate Funds recently added disease management to its health care program. “It gets employees into the right programs during the first stages of their diseases, and then they’re helped by a case worker for the entire duration of their illness,” says Padgett at Wells Real Estate Funds.

Keep employees in the loop. Build employees’ trust – and educate them on their role in controlling expenses – by sharing information about plan costs. “Employees know exactly where they stand from a premium standpoint,” says Dale Kent, CFO, West Bend Mutual Insurance.

Consider debit cards for flexible spending accounts (FSAs) or health reimbursement accounts (HRAs). ITAGroup provides debit cards which make an already convenient benefit even easier.

Let retirees buy coverage at the group rate. If your company can’t provide full medical benefits for retirees, consider letting them buy in at the group rate until Medicare kicks in. ITAGroup takes this approach for employees who are 57 or older and have at least 20 years of service with the company.

Consider offering a “health advocate.” Wells Real Estate Funds recently added a health advocate program to their health care plan. “It’s basically a concierge service available to employees and their extended families,” says Becky Padgett, chief people officer at Wells Real Estate Funds.

Best Practices in Employee Education & Communication

Give out free food. “Food always works. Every time. We’re all losing weight, but we don’t mind a free lunch!” exclaims Lorna Williamson, human resources director at Howalt-McDowell Insurance.

Consider mandatory attendance at benefit meetings. “‘Mandatory’ says the company thinks it’s important. We’re committing their time. That works the best,” explains Susan Rantz, human resources generalist at McNaughton & Gunn.

Work meetings around your employees’ schedules. “We have producers who want to be out selling,” explains Williamson at Howalt-McDowell Insurance, “so we schedule meetings in smaller groups. We’re also considering holding evening meetings.”

Make benefit information more accessible. Eastern Financial Florida Credit Union worked with its broker to develop a benefits website that employees can access at work or home.

Show employees their total compensation. All of The Principal 10 Best Companies—2006 distribute a customized total compensation statement each year to each employee. The statement shows the employee’s salary, along with the dollar value of the benefits the employee receives.

Talk one-on-one with employees. One-on-one communication is critical, according to The Principal 10 Best Companies—2006. Central Iowa Power Cooperative takes this approach by using one-on-one conversations to educate employees and to solicit feedback on benefits. “We’re darned good listeners,” says Dennis Murdock, the company’s CEO.

Hold focus groups. GTE Federal Credit Union uses this approach to identify the best way to market benefits to employees.