The 2022
Excellence & Innovation Awards
Stories by Margarida Correia, photography by True Photography

Meet the 2022 winners

Executives who spearheaded campaigns that took new approaches to solving old problems in workplace retirement plans won top honors at the 11th annual Excellence and Innovation Awards, sponsored jointly by Pensions & Investments and the Defined Contribution Institutional Investment Association.

In a ceremony held Oct. 25 as part of P&I’s DC West Conference in Carlsbad, Calif., both P&I and DCIIA recognized seven individuals – and one team – for diverse campaigns featuring everything from qualified longevity annuity contracts, or QLACs, to Social Security claiming strategies. Other winning efforts included tiered non-discretionary employer contributions that rewarded lower-paid employees more than they did higher-paid employees.

Some of the winners earned notice for bold moves, such as using target-date funds as a vehicle through which to spice up their retirement plans with things like QLACs and private-market investments. Others were recognized for overhauling their retirement plans and adding modern design features. To learn about this year’s winners, click on their profiles below.

Excellence & Innovation Award Winners

Excellence & Innovation

American Express Retirement Team

American Express Co.

When American Express Co. saw an opportunity to help its 401(k) plan participants improve their savings rates, it didn’t miss a beat.

The company implemented a non-discretionary company contribution, rewarding its lower-paid workers more than its higher-paid employees. Lower-paid workers now receive a 3% automatic contribution to their 401(k) retirement accounts, while higher-paid workers receive 2%.

The new contribution replaces an annual discretionary profit-sharing contribution that varied from year to year.

“Higher contribution rates for lower-paid employees can really support financial well-being for those most in need,” Barbara Kontje, the company’s New York-based director of retirement and smart saving, said in an application nominating the American Express Retirement Team for an Excellence and Innovation Award, which it won.

Ms. Kontje declined to be interviewed.

American Express also boosted employee default savings rates to 6% of total pay from 3%, a change that positioned employees to maximize the company’s 6% dollar-for-dollar match from the beginning. The twin moves would over time improve retirement income replacement rates for all participants, Ms. Kontje said in the application.

The company also implemented other plan design changes, including allowing former employees to stay in the plan after reaching the age at which they must start taking required minimum distributions and permitting them to make multiple withdrawals from their 401(k) accounts. It also added what is referred to as a “super Roth” feature giving participants the option to automatically convert after-tax contributions to Roth contributions each payroll period.

Participants were especially appreciative of the new Roth capability because the Roth conversions could be done online without the need to phone the call center for assistance, saving time, American Express said.

Judges applauded the plan design changes, saying American Express implemented several best practices and focused on what one described as “equity for employees across the pay scale.” “I love the focus on lower-paid employees,” one judge said.

―By Margarida Correia

+ Read More
Excellence & Innovation

Hunter Bethea

Director of deferred compensation programs
Tennessee Department of the Treasury

The people most at risk of not having enough money to retire on may not always know the danger they are in.

That’s why the Tennessee Department of the Treasury initiated a campaign aimed at helping high-need participants in the state’s 401(k) plan through one-on-one meetings with financial advisers, said Hunter Bethea, director of deferred compensation programs for the Treasury Department in Nashville, Tenn., and winner — along with his team — of an Excellence & Innovation Award.

State Treasurer David H. Lillard Jr. had long promoted the one-on-one participant meetings offered through the state’s RetireReadyTN retirement program and “wanted to drive more at-risk participants to take advantage of the service,” Mr. Bethea said.

“The purpose of RetireReadyTN programs is to make sure that public employees in the state of Tennessee are on track for a successful retirement, and we want to make sure that these services are benefiting every participant we have to the maximum extent possible,” Mr. Bethea said.

RetireReadyTN officials worked closely with the plan’s record keeper, Empower Retirement, to leverage data from the Tennessee Consolidated Retirement System’s defined benefit plan to identify high-need 401(k) participants and improve retirement readiness metrics overall, Mr. Bethea said.

One of the four high-need groups the program identified consisted of participants who were not contributing to their 401(k) accounts. Participants were automatically enrolled in the mandatory 401(k) plan at 2% of their salary, but some participants dropped the deferral to 0%. The $4.63 billion plan, which was made available to new hires in July 2014, gave participants a non-elective employer contribution of 5%.

Individuals with retirement income replacement ratios below 70% were also identified as being at risk, as were individuals over the age of 50 whose 401(k) accounts were more than 75% invested in equities.

The fourth high-need group consisted of individuals with a high level of inflation risk: those under age 50 with less than 25% invested in equities and those over age 50 with less than 10% in equities.

Roughly 60% of the 200,000 Tennesseans in the 401(k) plan and the $650 million 457 deferred compensation plan were at risk in some way, with most having high inflation or equity risk, Mr. Bethea said.

In addition to sending targeted messages to each of the high-need groups, RetireReadyTN heavily encouraged participants to take advantage of one-on-one meetings with Empower’s plan advisers. The Tennessee Treasury Department’s outreach team, for example, introduced advisers at government employee conferences and promoted plan adviser meetings at regular employer and employee information sessions conducted throughout the year.

The introductions were important in helping state employers overcome their wariness in working with outside vendors.

“We teach both employers and employees to be cognizant of businesses reaching out that may not be working in their best interest,” said Ashley Nabors, assistant treasurer for the financial empowerment division of Tennessee’s Treasury Department in Nashville, Tenn.

State employers were assured that the advisers did not work on commissions and did not receive compensation based on the actions taken during the one-on-one meetings.

“Even though they are not employees of the state of Tennessee, they are the only contractor that we authorize to present information on our behalf and conduct these types of meetings,” Mr. Nabors said of Empower’s plan advisers.

Judges commended the program’s focus on high-need participants with one judge praising its clever tagline, “Your investments may be out of balance with your life.”

―By Margarida Correia

+ Read More
Excellence & Innovation

Karla Kirkling

Executive director of health care and benefits
Chicago Public Schools

When Chicago Public Schools, one of the nation’s largest school districts, realized it was too unwieldy to continue working with three record keepers in running its 403(b) retirement plan and companion 457(b) deferred compensation plan, it moved to downsize to a single vendor.

“It was really about being able to shift to an exclusive provider so we could have more control over our communication and engagement strategy,” said Karla Kirkling, CPS’ Chicago-based executive director of health care and benefits and winner of an Excellence & Innovation Award.

CPS also wanted to align with ERISA best practices even though schools and other public institutions are not governed by ERISA law, she said.

Having three record keepers — Empower Retirement, Voya Financial and American International Group Inc. — meant that the 51,110 participants in the school district’s two plans had different investment lineups, which resulted in inequitable employee access to investments because Empower provided only mutual funds while Voya and AIG provided only annuities, Ms. Kirkling said.

“We wanted to streamline that and make sure that all of our staff had access to the same types of investment options,” she said.

The differences also made it difficult to “get data consolidated” and see how the plans were performing, Ms. Kirkling explained.

In addition, having multiple record keepers created an unhealthy dynamic with leaders of different schools and administrative buildings favoring certain providers over others. “They essentially started to give some of those reps more access to their staff versus others,” Ms. Kirkling said of school officials and their preferred record-keeper reps.

Even more problematic, the three record keepers were cross-selling outside products for which employees were paying high fees. “We didn’t want it to be a commission-based environment where our reps were focused on making commissions as opposed to providing proper education for retirement readiness,” Ms. Kirkling said.

As part of the record-keeper consolidation that ended with AIG winning the business, CPS created a single investment lineup made up of 12 equity, fixed-income and target-date-fund investment options, down from 17 investments that participants were seeing in their lineups before.

“We give them choice but not too much choice,” Mr. Kirkling said, explaining that too many options often lead to participants not picking anything at all.

CPS estimates that the new investment lineup saves participants with a $50,000 balance anywhere from $177 to $492 annually in fees, while those with $100,000 see annual savings of $372 to $1,012. Despite the cost savings, the consolidation effort wasn’t an easy sell, even initially among participants.

Convincing participants that choice was not taken away was the toughest aspect of the consolidation, Ms. Kirkling said, explaining they didn’t always see the benefits of the move.

“When they hear the idea of someone downsizing to an exclusive provider, they say ‘wait a minute, you’re taking my choice away from me,’” she said of participants.

To assuage participant concerns, CPS hosted webinars stressing the new low-fee investment options and other benefits of having a single record keeper.

Judges commended CPS for taking on the challenging task of consolidating record keepers, a move that significantly reduced costs to participants. Bringing down the cost of a $100,000 account balance by $372 to $1,012 annually “is a significant cost saving for a teacher,” one judge said.

―By Margarida Correia

+ Read More
Excellence & Innovation

Marco Merz

Managing director and head of defined contribution, UC Investments
University of California


Hyun Swanson

Interim executive director, systemwide human resources
University of California

Being first at anything is hardly ever easy.

So it was with the University of California, the first employer that dared to offer participants in its 403(b) retirement plan a qualified longevity annuity contract, or QLAC, by having it embedded in the plan’s UC Pathway target-date funds.

The feat was difficult because it had never been done before, but for Marco Merz, one of two joint winners of an Excellence & Innovation Award, the hard work was well worth the effort.

With new employees increasingly choosing to participate in the university’s defined contribution plan over its defined benefit plan, the university felt it was important to give its DC participants some form of guaranteed income to protect them from outliving their savings in retirement, said Mr. Merz, managing director and head of defined contribution, UC Investments at the University of California in Oakland, Calif.

By incorporating deferred lifetime income into the target-date funds, DC plan participants are able to purchase a guaranteed income stream at a time when they most need it, he said. The offering officially rolled out in August 2021.

As a result of the effort, participants between the ages of 62 and 69 can now buy a QLAC in an amount ranging from $10,000 to $145,000, with monthly payments starting at age 78.

A 62-year-old single participant looking to buy a QLAC in the amount of $100,000, for example, would receive lifetime monthly payments of $1,254 beginning at age 78, according to an interactive estimator on the university’s website. Participants pay for the QLAC with the assets in their target-date fund.

The QLAC is also available in the university’s 457(b) and 401(a) plans.

The challenges were many. The university had to create “virtually everything from scratch,” secure buy-in from numerous stakeholders and overcome difficult legal and operational issues, Mr. Merz said. “We had to build everything from the ground up,” he said. “There was nothing we could leverage that already existed for the most part.”

The legal structure, in particular, was tricky. The university entered into a group annuity contract with the insurer, MetLife Inc. but the individual participant contracts are held outside of the plan, an arrangement that involved a great deal of coordination with Fidelity Investments, the record keeper for the three plans, Mr. Merz said.

Participant communication was also a huge challenge, said Hyun Swanson, University of California’s interim executive director, systemwide human resources, in Oakland, Calif., who also received an Excellence & Innovation Award as a joint winner.

“QLACs are unfamiliar to most of our participants, and so we had to educate people on what a QLAC is,” she said, adding that biases around annuities were persistent.

Individuals were reluctant to pay for the QLAC upfront not knowing whether they would live long enough to recoup their money back, she said.

Ms. Swanson assured participants that the QLAC offered a “return of premium” feature that not all annuities have. A return of premium provision gives the employees’ beneficiaries the right to receive the remaining premium not paid out prior to the employee’s death.

Getting buy-in from the multiple stakeholders – human resources, labor unions, the retirement system advisory board, the retirement savings advisory committee and the board of regents, to name a few – was also challenging but worthwhile given the “superior solution” it wound up with, Mr. Merz said.

Originally, the university wanted to default participants into the QLAC, but after discussions with its stakeholders, decided to have participants “opt-in” of their own volition instead.

Defaulting participants into an unfamiliar structure like a QLAC “was just not palatable,” Mr. Merz said.

“We can’t have participants that have never heard potentially about a QLAC automatically be defaulted unless they say no,” Mr. Merz said.

Judges praised the university for taking on such a technically and logistically complex project and lauded the communications campaign built around it.

“Bravo,” said one of the judges. “Indeed, a herculean effort,” said another.

―By Margarida Correia

+ Read More
Excellence & Innovation

Christopher Moss

Senior manager of employee benefits
Sonoco Products Co.

After shuttering its defined benefit plan in 2021, global packaging company Sonoco Products Co. knew it needed to turn its attention to its $1.2 billion 401(k) plan.

“It was time to focus on the 401(k) plan and freshen it up as far as the benefits were concerned to make it appeal more to the contemporary workforce,” said Christopher Moss, Sonoco’s Hartsville, S.C.-based senior manager of employee benefits and winner of an Excellence & Innovation Award.

The company eliminated its 4% non-elective contribution and used the savings to boost its 401(k) match. Under the new matching formula, employees now receive a dollar-for-dollar match up to 6%, an improvement over the 50 cents they were receiving on the dollar, up to 4%.

“We would always get gripes about our lousy match,” Mr. Moss said, referring to the previous 2% maximum company matching contribution.

Sonoco also eliminated caps on the employee contributions of high-income earners making more than $135,000. Previously, highly compensated employees could only contribute 6% of their pay to their 401(k) accounts.

“Highly compensated employees never had the opportunity to maximize their savings under the plan,” Mr. Moss said.

The company also raised the auto-enrollment savings rate to 6% from 4% and added an auto-escalation feature that automatically raised deferral rates 1% per year, up to 10%.

For many years, the company auto-enrolled participants at 3%, which Mr. Moss said was probably too conservative. “People were stuck at the 3% level, so now we’re getting more people in the 4, 5 and 6-plus category,” he said.

As a result of the auto escalation and other features implemented, 56% of Sonoco’s 13,000 participants now contribute at least 6%, up from 39% who were doing so prior to the plan redesign.

As of Aug. 31, deferral rates averaged 7.2%, up from 6% before changes were implemented.

Participation rates, which were already fairly high prior to the changes, jumped even higher to 97% from just over 90%.

“We went from 900 people not participating at all to 100 people not participating,” Mr. Moss said.

As to direct employee feedback, Mr. Moss said: “I’ve not had anybody complaining.”

Judges praised the company’s effort to help employees secure their retirement absent a pension plan. “While you hate to see another employer shifting from a defined benefit and defined contribution model to a defined contribution model only, the effort made by Sonoco to help ensure that employees not only participate in the defined contribution plan but also save enough to stay on track toward long-term financial goals is commendable,” one of the judges said.

“A lot of very positive changes,” said another.

―By Margarida Correia

+ Read More
Excellence & Innovation

Kim Olson

Director of retirement plans
Wespath Benefits and Investments

Wespath Benefits and Investments, a non-profit agency serving the United Methodist Church, knew its popular retirement income modeling tool had the potential to do a lot more for the roughly 1,000 clergy members retiring each year.

The tool had been successful in showing clergy how much they could withdraw from their retirement accounts without straying from their “safety zone” but needed more options for members wishing to delay their Social Security benefits and those looking for guaranteed income, said Kim Olson, Wespath’s Glenview, Ill.-based director of retirement plans and winner of an Excellence & Innovation Award.

“As the United Methodist Church considers transitioning to a defined contribution model, we wanted to offer features that maximize the participant’s income distribution while minimizing their risk,” she said.

In pursuit of that goal, the non-profit in April rolled out an upgraded modeling tool that now factors in two new options that the 65,000 participants in Wespath’s $7 billion 403(b) can elect when planning their drawdown strategies. Participants can choose what’s called the Social Security bridge, which lets them use part of their account balances early in retirement so they can delay claiming — and therefore increase — their Social Security benefits. Participants can also buy a qualified longevity annuity contract, or QLAC, that provides guaranteed income beginning at age 80.

The modeling tool adjusts the withdrawal amount that participants can take out each year based on their circumstances and automatically gives them cost-of-living adjustments “should their funds be sufficient for them to have that increase,” Ms. Olson said. The tool also helps them understand how the optional QLAC and Social Security bridge will impact their withdrawal amounts, she added.

Participants wishing to buy the QLAC must do so when they start drawing funds from their retirement accounts, which can be as early as age 55 or as late as age 74.

Wespath deliberately chose a deferred annuity as its annuity option because “it affords participants that which an annuity does best,” said Martin Bauer, Wespath’s senior managing director of benefit plans in Glenview, Ill. “It reduces the longevity risk without incurring the cost of having a lifetime annuity.”

Mr. Bauer added that the QLAC is significantly cheaper because it only starts paying out at 80.

Both the QLAC and the Social Security bridge had strong participant uptake. Since going live in April, nearly 30% of the participants retiring this year enrolled in at least one of the two features with many enrolling in both, Ms. Olson said.

Judges praised the initiative for giving participants the ability to use their retirement plan balances in a way that would let them delay their Social Security benefits, something one judge said “isn’t an explicit goal in a majority of plans.”

Too many defined contribution plans hand participants “a big bag of money” at the end of their career without any guidance about what to do with it, Mr. Bauer said.

“Wespath’s motto is we care for those who serve,” he said. “Clergy by definition serve the church for a lifetime and we therefore felt it is important to support them throughout a lifetime.”

―By Margarida Correia

+ Read More
Excellence & Innovation

Allyson Tucker

Washington State Investment Board

A dash of private equity, private real estate and other spicy investments typically found in defined benefit plans could go a long way in boosting the returns of participants saving for retirement in defined contribution plans.

That was the thinking behind The Washington State Investment Board when it decided to add a mini or “unitized” version of its DB plan to the target-date funds offered in its DC plan in late 2021.

The unitized version of WSIB’s pension plan — known as the Total Allocation Portfolio or TAP — included private market investments, which were not available in the DC plan. By tucking it into the DC plan’s default target-date strategy, participants would have exposure to asset classes that have performed well over time.

“We wanted to improve outcomes for our participants by adding these asset classes that otherwise would not be there,” said Allyson Tucker, the Olympia-Wash.-based chief executive officer of Washington State Investment Board and a winner of an Excellence & Innovation Award.

In addition, Ms. Tucker noted that the WSIB was looking for greater parity between the two types of retirement plans.

“We wanted the DC members to have access to the strong performance record and competencies that we’ve built on behalf of the DB plan,” she said.

The revamped target-date funds, which include the private investments or “TAP component” in their glidepath, are the default option for more than 343,000 participants in both the DC plan as well as WSIB’s deferred compensation plan, which together had $25.1 billion as of June 30.

Revamping the funds, however, did result in a modest increase in overall fund cost, which the WSIB justified given the potential investment outcomes.

“Research showed that on a net-results basis, the historic return premium was easily sufficient to justify the small increase in cost,” Ms. Tucker said.

Fees increased to 20 basis points from 12 basis points with the addition of the TAP, she said.

The seemingly straightforward initiative turned out to be more complicated than expected. “It seemed like it was a very simple idea to put the unitized version into the target-date fund,” Ms. Tucker said. “It surprised us that it was a lot more complicated than we anticipated.”

For starters, the TAP had liquidity constraints unlike the target-date funds, which have daily liquidity. The WSIB had to work through the “different alignment of liquidity measurements,” Ms. Tucker said. In addition, there were legal considerations as well as operational issues associated with working with the plan’s record keeper and target-date fund managers to make sure all the information was shared and priced appropriately, Ms. Tucker said.

Judges praised WSIB for giving participants access to asset classes they typically wouldn’t be able to access in a DC plan. “It is innovative and something other public plans should consider or ERISA plans could push the Department of Labor to offer an exemptive solution on,” said one of the judges.

―By Margarida Correia

+ Read More

Meet the 2022 judges

Defined contribution consultants, DC sponsors and investment consultants were among the judges who worked with representatives of  Pensions & Investments  and the Defined Contribution Institutional Investment Association to evaluate entries for the 2022 Excellence & Innovation Awards.

The external judges were:

  • Robert Beideman, director, retirement plans, Southern Co.
  • Johara Farhadieh, executive director, CIO, Illinois State Board of Investment
  • Algretta Hatcher, senior director, corporate services, benefits administration, RWJ Barnabas Health
  • Lisa Joe, director of retirement programs and services, Board of Regents of the University System of Georgia
  • Marla Kreindler, partner, Morgan Lewis & Bockius
  • Jamie McAllister, senior vice president, defined contribution practice, Callan
  • Lew Minsky, president, CEO of the Defined Contribution Institutional Investment Association
  • AJ Padilla, chairman, City of Austin (Texas) Deferred Compensation Committee
  • Mohammad Raihan, Chief Retirement Officer, NYC Health & Hospitals
  • William Ryan, partner and head of defined contribution solutions, NEPC
  • Karen Witham, communications and marketing, DEI and ESG at Defined Contribution Institutional Investment Association
  • Megan Yost, senior vice president, engagement strategist, Segal Benz

Judges from Pensions & Investments were Julie Tatge, executive editor; Robert Steyer, reporter and Margarida Correia, reporter.

Excellence & Innovation Award Finalists

  • Chris Davies, CEO, Telstra Super
  • Terri Deneen, corporate planning and finance director, EBSCO Industries
  • Doug Gardner, director-corporate human resources, Seneca Foods
  • David Harris, director, retirement and risk management services, Gwinnett County Public Schools
  • Robert Holdom, vice president, total rewards, New York-Presbyterian Hospital
  • Diane Kaiser, Choice 401(k) plan manager, Public Employee Retirement System of Idaho
  • Krista Manning, AVP, strategic solutions and business development, Voya Financial
  • Erin Michels, assistant director, benefits programs, Research Foundation for the State University of New York
  • North American Adventist benefits committee, North American Adventist Church
  • Brent Reeves, senior treasury manager, Johnson Controls