Wright-Hennepin Cooperative Electric Association

Wright-Hennepin Cooperative Electric Association likes to do a recordkeeper request for proposal for its retirement plans every five years, and the 2022 review resulted in keeping Principal Financial Group but also making tweaks to the 401(k) and nonqualified plans. “We asked ourselves, ‘Are there other things we should be offering to our employees, to help support them through their financial wellness journey?’” says Jennifer Severson, Wright-Hennepin’s vice president of human resources.

Rockford, Minnesota-based Wright-Hennepin is a member-owned, not-for-profit electric utility that provides power to parts of two counties in the Minneapolis-St. Paul metropolitan area, rural Wright County and western Hennepin County. Its 401(k) union and nonunion plans offer a sizable employer contribution: 100% of 1% salary defferal and 50% of the next 5% for both the union and nonunion plans, plus a 6.63% nonelective contribution for the union plan and a tenure-based nonelective contribution (ranging from 4% to 11%) for the nonunion plan.

Tim Sullivan, Wright-Hennepin’s president and CEO, sees a business case for that considerable expense. “A critical element of our total rewards package is providing above-market benefits, and the single biggest competitive advantage we have is the generous 401(k) contribution,” he says. “It’s a very difficult benefit for other employers to match.”

Asked how he defines success for the 401(k) plans, Sullivan points to the 99.1% participation rate and the 8.3% average deferral rate. “The higher those numbers, the more invested our employees are in their retirement plan—both literally and figuratively,” he says.

Last year, Wright-Hennepin decided to add an automatic escalation feature to the 401(k) plans, increasing 1% a year up to 10%. Last year, participants also began to get access to Principal’s Target My Retirement, a retirement planning solution powered by Morningstar Investment Management LLC.

After briefly inputting some information, participants receive a personalized plan that incorporates guidance on several elements, including: which investment options they should choose; how much they should be saving now or spending in retirement; when they’ll likely be able to retire; and when they should start collecting Social Security benefits. Participants utilizing Target My Retirement can make their own investment selections from the menu or opt to go into the solution’s managed accounts, which Morningstar oversees.

Wright-Hennepin also added the financial wellness tools of third-party provider Your Money Line in 2022 to help employees with basics such as budgeting, debt management and accountability coaching. The tool can measure an individual’s financial health and suggest areas for improvement, as well as track that person’s financial wellness progress.

For the nonqualified plans, Wright-Hennepin’s 2022 review resulted in moving from a 20-year vesting schedule to a five-year cliff vesting schedule, which Severson says makes the benefit considerably more valuable in the eyes of the executives who participate. Wright-Hennepin also decided last year to let nonqualified plan participants invest their funds in an investment menu that mirrors the 401(k) plan menu. “The money for the nonqualified plans used to be just sitting on our books, and the participants couldn’t invest it,” Severson says. “Now, at the beginning of every year, we make that contribution to their account, and they can go in and select whatever level of investment risk they want.”

—Judy Ward