Tingley Rubber Corp.

“The managers at Tingley have always found that the retirement planning is very important. … They’ve done a lot.” 

When people are hired at Tingley Rubber Corp., they tend to stay a while. The company, headquartered in Piscataway, New Jersey, has very little turnover, with 13 years of service on average, says Human Resources (HR) Manager Nancy C. Jenkins. In fact, Jenkins herself just retired in July after working there for 43 years.

The company has also enjoyed a longstanding relationship with its advisers. In the 1940s, current Chairman and CEO Bruce McCollum’s grandfather, William McCollum, met an adviser named Warren F. Coe—aka “Corky”—during a winter vacation in Daytona Beach, Florida. As Corky and McCollum’s grandfather got to talking, they agreed it was time for everyone—not just the salaried employees—to have access to a workplace retirement plan.

From that genesis, back when the company was a producer of rubber overshoes, molded components for original equipment manufacturer (OEM) companies and splash guards for bicycles and cars, to today as a full-line protective footwear and clothing company, it has always worked with the same advisers: first, Corky of Warren F. Coe and Associates, and now Michael Scott, owner and managing partner of the firm under its new name, Independence Financial LLC. Scott, based in Wisconsin, has served Tingley Rubber for almost 20 years, seeing, for instance, that participants receive annual educational sessions and one-on-one consultations with financial advisers.

This consistent relationship with its advisers has created credibility that helps employees feel comfortable talking to them about their savings, McCollum says. For participant education, Tingley also partners with local adviser Stock Illoway of 1847Financial, who is based in Pennsylvania. Illoway himself has worked with the plan since 1981, so he’s a familiar face in the office and is encouraged to walk around and talk to the employees between education meetings.

During those meetings, which are designed to be entertaining and encouraging, Illoway stresses the importance of the end result in financial planning rather than the short-term outlook. Jenkins keeps attendance, so Illoway can reach out to those who couldn’t attend and see if he can engage them in a conversation about saving.

“Nancy really goes above and beyond to make sure all the [employees] know what the plan is, what their options are and where they can get help,” he says. “The managers at Tingley have always found that the retirement planning is very important. … They’ve done a lot.”

Tingley strongly advises in its new-participant orientation meetings that employees “Save as much as you can, as often as you can, whenever you can.” Advisers attending the orientation can provide individualized investment advice on topics including retirement planning, budgeting, 529 college plans and insurance; spouses or partners are also welcome to attend.

Through its provider of 13 years, Empower Retirement, participants have access to My Financial Path, a tool that gives them actionable steps to achieve financial goals.

“[Tingley Rubber] as a whole has always been an advocate of education,” Scott says. “So it has always made these meetings available, and the participation at them is very good.”

Last year, Tingley upped its education game with Jeopardy-style sessions. Scott explains that the company used software that allows participants to log in to a website via their phone and answer questions about retirement planning, the market and more. “The thing we really liked about it is that the level of engagement went up substantially, versus with a standard PowerPoint presentation,” he says. “Everyone likes to get competitive, I guess.”

Annual educational sessions focus on specific topics and have included “Beyond Investment Illusions,” “How Retirement Ready Will You Be?” and “Don’t Let These 6 Behaviors Mess With Your Retirement.”

Crunching the numbers

Tingley’s retirement plan started solely as profit sharing, and in 1986 the company introduced the 401(k) feature and changed the plan’s name to the Tingley Employee Savings, Profit Sharing and Retirement Plan. It offers a traditional safe harbor matching contribution—100% of deferrals up to 3% of compensation, plus 50% of the next 2%—and is 100% vested. The employer also has consistently contributed profit sharing of 3% of eligible compensation with a gradual vesting schedule, and employees are 100% vested at five years of service.

In addition, automatic enrollment begins at 6%, with only a few employees opting out. The company previously matched 50% up to 6%. When it switched to being a safe harbor plan, says Jenkins, it maintained the 6% in auto-enrollment.

Unlike at many plans, auto-enrollment at 6% was “not a big needle-mover,” Scott says, because “participation was really strong, regardless.” With the exception of one employee who transitioned from full-time to part-time last year and received a monthly in-service distribution, Tingley Rubber has a 100% participation rate.

“So I think [auto-enrolling] was more wanting to convey the message that the company’s wanting to do what’s right for the participant” through automatic features, Scott says.

Today, the average employee deferral rate at Tingley Rubber is an impressive 12%. Tingley’s planwide average lifetime income score, calculated by Empower and assuming a 75% income replacement target, is 94. The score, when averaging all Americans participating in a workplace retirement savings program, is 64. Tingley’s average account balance is $305,805 compared with a benchmark of $94,379, Jenkins says.

The safe harbor match is a notable contributor to the lifetime income score, Jenkins says, adding, “Don’t leave money on the table.”

Tingley offers a wide range of investment funds across asset classes: 35 funds to provide investment diversification including target-date funds (TDFs)—the Great-West Lifetime Fund—international and specialty funds as the default investment, among others. As TDFs take the “guessing game” out of a correctly diversified portfolio, the focus of education has shifted from stock market performance and funds to retirement planning and budgeting—“saving the right percentage of money and ultimately, the retirement planning itself,” Scott says.

Regarding fees, a recent fiduciary benchmark report showed that the middle 50% of plan fees range from 0.79% to 1.05%, with the Tingley plan continuing to do well with below average in fees at 0.88%, Jenkins says.

Future innovation

The sponsor works with Empower to stay updated on legislative changes, next-generation investment solutions, and new products and services, Jenkins says.

In the past several months, the sponsor has made a few plan design changes including amending the plan’s entry date. Now new employees participate as of the first day of the month that coincides with the completion of three months of service; the previous entry date was the calendar quarter after three months of service. Tingley also now allows new retirees to take their distribution in the form of installments.

Jenkins’ organization of, and continuous encouragement of employee participation in, the 401(k) plan has been a big part of its success, Scott says, noting that the ultimate goal is to help employees “retire with dignity.”

As the 401(k) plan evolves over time, the sponsor hopes it will continue to be a tool to attract and retain employee talent, and enhance the customer experience in the process. It still adheres to the message it sent to its workers to introduce the DC plan: “… recognizing in a substantial way [the company’s] appreciation of the loyal and effective services of its employees.” —Corie Hengst