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The Best Practices Guide: An Automatic Success

CENTRIA used auto tools to give 401(k) participation a big boost

What's the biggest roadblock to 401(k) participation? Procrastination, according to Bob Burik, director of administration at CENTRIA.

"When we talked to the young folks on the plant floor about signing up for the plan, they'd say, 'I'll get in later.' 'Later' is after 90 days. In 90 days, they didn't enroll," says Burik.

"The HR folks had a lot of things on their plate, and they didn't have time to call people back in," Burik continues. "Those folks fell between the cracks. When you don't get them participating on day one, you lose them."

Last year, the company decided to eliminate that problem by implementing automatic enrollment. "Only eight people opted out of auto enrollment. That tells us that the people we auto enrolled really needed the motivation to do it," says Burik.

The company also added automatic deferral increases, increasing the three percent starting deferral by one percent each year for three years. "We want them to maximize the company match," Burik explains. CENTRIA matches 100 percent of the first one percent of pay and 50 percent on the next five percent of pay. The company also contributes two percent quarterly.

For employees who weren't comfortable managing their own investments, the company added lifecycle funds. And to top it all off, their investment consultant—who regularly travels to every location—educated employees on how to use the models and the importance of balancing risk and return.

The result? A dramatic increase in 401(k) plan participation—from 75 percent to 96 percent in just six months. Burik, of course, is pleased. "Those initiatives paid huge dividends, and they were very well-received."

"When you don't get them participating on day one, you lose them."
– Bob Burik, director of administration, CENTRIA

What can you learn from CENTRIA?

• Automatic enrollment can boost participation.
• Automatic deferral increases can help employees take full advantage of the match.
• Lifecycle funds will help employees feel more comfortable about investing.

About CENTRIA

Find out more about their benefits in CENTRIA's winner profile.