Dotson Iron Castings

Since Dotson Iron Castings hired advisory firm 401k Plan Professionals in mid-2017, good things have happened. According to Kelly Peterson, business process specialist at Dotson, many plan changes have been accomplished that improved overall plan participant satisfaction and engagement.

Dotson Iron Castings, in Mankato, Minnesota, is almost 150 years old, having started as a blacksmith shop in the 1870s. Today, it produces ductile iron castings of up to 50 pounds for the agricultural, heavy truck, industrial manufacturing and construction markets.

“We are a jobbing shop,” Peterson explains. “We don’t make our own castings. Some of our big customers are Toro and John Deere. They come with the part they need, and we work with our engineering team and make the best casting out of it. We have about 150 customers that we work with.”

Peterson recalls, “We had been with our previous financial advisers for many years. Their fees kept going up, and their service went the other way.” To compound the challenges, the manufacturer’s recordkeeper changed three times over two years. “So, we went to market for both,” Peterson says. “We hired 401k Plan Professionals, partially due to pricing but mostly because of its passion for education, especially one on one.”

Working with its new advisory firm, Dotson moved to Empower Retirement, also merging its union 401(k) plan into the nonunion 401(k), in effect halving the amount of compliance testing and tax filing. “We streamlined and automated some plan design features and implemented automatic enrollment. We also started to focus more on contributing a percentage rather than a set dollar amount,” she says.

These change resulted in a 25% savings to participants. The company also enhanced the fund lineup and obtained lower-expense share classes, resulting in a savings of approximately 38 basis points (bps) as a weighted average.

A team from 401k Professionals takes a day each quarter to visit Dotson Iron Castings to provide education and participant advice, says 401k Investment Advisor Representative Jenna Witherbee. Even though there are just 188 participants in the 401(k), she says, many of them take advantage of these services.

“Dotson has three shifts, so sometimes we’ll go down to Mankato the night before, so we can get up really early to catch the end of the third shift, then the first shift and then second in the afternoon,” she says. “The company typically has new people, and established workers check in, and we see where they are at and if they need to make any changes, ask questions, do rollovers, what have you.”

The meetings, which have occasionally been combined with safety or open enrollment meetings, are especially valuable, Witherbee says, as they give her a rare opportunity to see this workforce in a group setting “and help the people one on one. Doing so has been very effective.” Continuing to meet, in a virtual setting, due to the pandemic, “has been pretty good,” too, she says.

Because the workforce is quite young, Peterson says, it would be easy for them to say, “‘I don’t have to worry about retirement savings.’ But we have a pretty engaged group of young people. We’ve given them good education, and we continue to do that along with providing additional tools such as what Empower offers on its website. We added a Roth after-tax option that we definitely see the younger group using more often.”

Witherbee emphasizes the strong relationship the two companies have built over the past four years. “The folks at Dotson Iron Castings are really quality people. They’ve been through a lot—not only from a 401(k) standpoint, and putting a lot of time and effort into it, but several years ago they had a devastating fire in their facility. They are very strong and determined and want to do the right thing. We’ve been able to make really effective changes with their plan, and we enjoy working with their staff,” she says.

—Judy Faust Hartnett