True Value Company, LLC

True Value Company, LLP, attributes its 97% 401(k) plan participation rate to plan design, continuing financial education and effective communication to its diverse workforce. The plan allows all employees to participate, and such a high participation rate in a retail environment is impressive.

Emphasizing the 4% employer match has prompted participants to contribute to meet it, explains Steve Lilienthal, benefits manager at the company in Chicago. “True Value has educated associates that if their company is offering a 4% match, it’s in their interest to contribute 4% to get [it all] and not leave anything on the table,” he says.

True Value’s 401(k) plan participants are automatically enrolled at 5% of earnings. The need for retirement readiness is stressed to every employee cohort by way of financial education and communications about plan design features.

One challenge for communicating about retirement planning is that the company has several distinct groups of employees—hourly, salaried and part-time workers—with a wide range of backgrounds, and levels of financial or retirement planning sophistication. Hourly employees in warehouses don’t have workstation computers, and they might have no computer at home either, Lilienthal says. 

A financial well-being campaign was conducted a year ago May. Each week, different topics were the focus of companywide emails, discussion on the company intranet (The Connection), webinars, human resource updates, and posters at each company location. Week 1 highlighted the free and unlimited one-on-one consultation sessions that Fidelity Investments offers. Week 2 was a beneficiary- and email-setup campaign. Week 3 introduced employees to Fidelity’s on-demand workshops for creating a rainy day fund, understanding spending, and managing debt, while Week 4 offered live Fidelity webinars on various financial wellness topics. 

The success of the campaign was revealed as follows: 8% more participants now have a beneficiary’s name on file; 6% more associates used one-on-one consultations; 100% of associates now have a current email address on file with Fidelity; and employees use Fidelity NetBenefits and tool kits 68% more than before.

Employee “communications [are] in all different formats because not everyone is the same and people retain information in different ways,” Lilienthal observes. “We focused on our hourly population in the warehouses to get them started on financial well-being—maybe it’s their first time—which was challenging because they generally don’t have access to computers, and we worked on how to get them more comfortable with mobile apps.”

Lilienthal credits True Value’s financial wellness focus for having reduced participant 401(k) loans and hardship withdrawals. In the past four years, requests for 401(k) loans dropped to 19% from 28%.

The plan sponsor also emphasized staying the course in bad times, he adds. COVID-19, geopolitical upheaval and inflation have combined to present additional challenges for workers with not only financial wellness, but also retirement planning. “The message to be more aware of where you are in your financial journey made employees more careful or maybe made them think that taking out a 401(k) loan isn’t the best solution”, Lilienthal says. “During COVID very few people took out loans; the percent actually decreased during that time period.” Loans and hardship withdrawals were addressed in webinars that examined the timing of such decisions, he notes.

Fidelity iced the cake with financial modeling tools that participants complete “showing what the impact of a loan or withdrawal is on retirement,” says Joseph Scully, vice president and managing director at Fidelity.

—Noah Zuss