Griffith Laboratories, Inc.

HEADQUARTERS: Alsip, Illinois

TOTAL PLAN ASSETS/PARTICIPANTS: $198 million/656

PARTICIPATION RATE: 87%

AVERAGE DEFERRAL RATE: 7.15%

EMPLOYER CONTRIBUTION: 100% of first 3%; 50% of next 2%

ADDITIONAL PLAN: ESOP

Automatic enrollment and escalation held no interest for Griffith Laboratories—as of this year, Griffith Foods—in Alsip, Illinois. However, above-average 401(k) participation and deferral rates were. The company has achieved its 87% participation rate and average deferral rate of 7.15% primarily by offering education and one-on-one advice from its adviser, True North Retirement Partners of Raymond James, headquartered in Chicago.

“We have been a privately held company since 1919, with a strong paternalistic direction to help employees,” says Sue Corbett-Florian, payroll/retirement benefits manager for the food products manufacturer. “We have always viewed our retirement plan and [employee] stock ownership plan [ESOP] as a foundation into which Griffith will contribute at least 8%.”

Griffith makes generous contributions to both its employee stock ownership and 401(k) plans—100% of a participant’s first 3% of contributions and 50% of his next 2%. Payments to the ESOP have averaged 5% to 8%. With an average deferral rate of 7.15% to the 401(k) plan, a 4% employer match and ESOP support of 8%, total contributions have averaged more than 19% in the past several years, Corbett-Florian says.

The resulting growth of savings has enabled a number of employees to retire early, she says. In 2015, 14 people retired, nine of them between the ages of 58 and 63. The promise of this potential advantage has built tremendously positive word-of-mouth about Griffith’s benefits and encouraged employees to stay with the manufacturer an average of 10 years, she says.

Two years ago, Griffith surveyed participants to learn what more they would like from their retirement plan, and the effort overwhelmingly revealed that they (70%) wanted to receive financial advice. So, the company decided to ask its recordkeeper, Wells Fargo, to create individual gap analysis letters for each. The company then scheduled a mandatory retirement plan meeting and introduced employees to its new adviser, Brian Lampsa, senior vice president, investments, at Raymond James, who walked them through the gap analysis.

Since then, 25% of Griffith’s employees have sought out one-on-one financial planning sessions with Lampsa. “Never did I expect this to take off like it has,” Lampsa says. “The word of mouth has spread. They realize we are not selling them anything, that our meetings are 100% confidential and that we can give them direction on all aspects of their financial picture,” be it about planning for retirement or managing debt. It has been through these advice sessions that True North “has built long-term trust with the company and the employees,” Lampsa says.

Griffith now holds group financial literacy education meetings each year, a week ahead of its annual health and financial wellness week in October. At those meetings, Lampsa promotes the topics being covered during wellness week.

Griffith augments these sessions with themed mailings and webinars from Wells Fargo. The topics change each month and have included, for example, pre-retirement and women saving for retirement.

“We have found we have a better chance of engaging employees through a grassroots effort than by mandating it through automatic enrollment,” Corbett-Florian says. “We think this method of personal contact information works better for us.” —Lee Barney