A Governmental DC Plan Sponsor Finds a Platform to Help Others

Government-sponsored retirement plans are not subject to the Employee Retirement Income Security Act, but they must consider how state laws affect plan administration. In some cases, this means automatic enrollment into a defined contribution plan is not allowed.

Even if auto-enrollment is allowed by a state, sometimes it takes a good argument to get all stakeholders to agree to implement it. Beth Conradson Cleary, executive director of the City of Milwaukee 457(b) Deferred Compensation Plan, says winning PLANSPONSOR’s 2022 Plan Sponsor of the Year Award in the Public Defined Contribution category helped the city provide that good argument.

“When we were nominated for the Plan Sponsor of the Year Award, we were excited because it was an opportunity to showcase the results of what we had done over the span of five-plus years with some plan-design changes,” Conradson Cleary says. “Getting recognition and being able to show and demonstrate the impact that we’ve had from incorporating auto-enrollment was really impactful. Because we’ve been benchmarking all those years, we were able to demonstrate the huge shift and our ability to close the disparity gaps when it came to race, ethnicity and gender groups.”

Conradson Cleary says she and her team tried to use the platform presented by the award to share their story to a wider audience.

If you work for or know of a great plan sponsor, the nomination period for the 2024 Plan Sponsor of the Year awards is now open.

Closing Disparity Gaps

“In talking with other plan sponsors, we’ve been able to help them appreciate and understand the power tool that auto-enrollment is when it comes to addressing goals related to closing disparity gaps,” she says. “We’ve been able to point to the award write-up and say, ‘Look at our plan, use us as an example if you’re trying to work with stakeholders to help them understand how to go about doing this and what design changes can help you achieve this.’”

Conradson Cleary adds that because the 2022 award profile highlighted some of the results the city achieved, other plan sponsors can use the city’s results to demonstrate the potential outcomes.

“Depending on what state your plan is in, you may or may not have obstacles when it comes to your ability to utilize auto-enrollment in terms of plan design,” Conradson Cleary says. “Every state is different in terms of how a plan sponsor may or may not have access to auto-enrollment, and in some cases, it’s only through collective bargaining or a legislative change.”

Conradson Cleary says she thinks what is unique about the City of Milwaukee plan is that her team has been both capturing and benchmarking data points that measure progress. “So that’s the other thing that we’ve been trying to help our fellow plan sponsors recognize is really important: the power of data—looking at it and tracking it,” she says.

Conradson Cleary says she has been talking to one peer plan sponsor in a state very focused on diversity, equity and inclusion initiatives. The plan sponsor was not successful in getting legislation passed to permit automatic enrollment before the pandemic. She suggested the peer use her plan’s story in conversations to show what the state would be able to achieve. “When you can position the narrative in a way that resonates with different parties and various stakeholders’ interests, it helps,” she says. “This goes back to what our board did, asking, ‘How are we doing?’ and ‘Are we living up to our mission and helping all of our employees the way that we say we want to?’”

Conradson Cleary says she feels like winning the Plan Sponsor of the Year award helped launch her plan’s story of auto-enrollment and other plan design changes even further. The plan’s recordkeeper has featured it as a case study and included it in a recent perspectives paper.

She also feels that her recent appointment to the executive board of the National Association of Government Defined Contribution Administrators will give her further opportunity to help fellow plan sponsors.

“It really boils down to best practices, and that’s what the [Plan Sponsor of the Year] awards look at,” she says. “Plan sponsors don’t have to try and reinvent the wheel. They can see what others are able to achieve and get recognized for.”