Art by Chris Buzelli
Plan Sponsor: Firmenich Inc., Plainsboro, New Jersey, North American headquarters
Key Player: Richard Deyo, senior director, human resources, North America
Plans: 401(k) plan with 1,400 active participants; Frozen DB plan; additional profit sharing
401(k) Participation Rate: 92%
401(k) Deferral Rate: 8% average
Firmenich Inc. is a family-owned Swiss company in the perfume and flavor business. Its largest footprint in North American is its research and development facility, in Plainsboro, New Jersey.
“We are passionate about our 401(k) plan,” says Richard Deyo, senior director, human resources (HR), North America.
“Sixty percent of our work force is in production-type roles and do not earn large salaries; however, we educate often about our 401(k) plan and financial wellness, resulting in a 92% participation rate and an 8% average deferral rate—proof that our message is well-understood.”
Since freezing its defined benefit (DB) plan, Firmenich has recognized its employees based on their age and years of service, offering additional match levels in the defined contribution (DC) plan for those who have longer tenure. The matches can range from 50% of the first 6% on the newest employees’ earnings to 150% of the first 6% for the most senior employees. The company matching contributions are based on the employee’s total earnings including bonuses and profit sharing. In addition, the company offers a nonelective 3% contribution based on the previous year’s total cash earnings.
The 3% is given to all non-DB-grandfathered participants every year, looking back on their previous year’s pensionable total cash earnings.
During open enrollment, the Plainsboro campus—the largest of Firmenich’s seven U.S. sites—has a benefits expo that covers not just the company’s health providers but all of its employee benefits, including its retirement vehicles. Firmenich began having the fair 18 years ago. “It’s part of the ‘culture first’ here. It creates community,” Deyo says.
Elaine Allessandro, HR specialist, benefits, at Firmenich, also in Plainsboro says, “We have a unique campus situation where the white-collar workers are on one side of the campus and the production workers are on the other. We allow the production staff to come off the site floor to attend the expo and to take the time to meet with the representatives. We want the participants to invest time in themselves.”
Allessandro says participants can discuss the details of the programs with the vendors, and, as at other times of the year, they can also set up one-on-one appointments to get further information.
“Events such as these help establish a stronger relationship between the participants and us—they help engagement with the plan,” says Rick Haseltine, relationship manager with Schwab Retirement Plan Services, in Richfield, Ohio, and Firmenich’s recordkeeper. “Working with the plan sponsor at these expos, the dialogues we have with employees help us target their needs and wants.” That information helps Schwab arrive at subsequent lunch-and-learn topics and determine what tools might be most helpful to guide participant elections and explain diversification, he says. “This helps to drive communications that year or the following year. The difference, over time, is that we become less of a vendor and more of a trusted partner.”
Firmenich makes sure that the Schwab representatives are available to those working all shifts the day of the expo.
Representatives come in at 7 a.m. Deyo says, “Some of the employees are working from 11 p.m. to 6:30 a.m.—it speaks volumes when you include all the shifts—they are often the forgotten shift.”
The company has the expo at its major site, but it keeps the education programs going at all locations; they attribute the plan's success to that.
“While many companies moved from DB to DC plans and took the opportunity to reduce or remove matches, we did not. We did move to a DC plan and froze the DB plan; however, we kept all things equal while shifting the risk from the company,” Deyo says.