Pacific Service Credit Union

When David Kato, Pacific Service Credit Union’s chief financial officer, wanted to engage employees with his firm’s retirement plan benefits, he did a Q&A at a company town hall based on the game show “Who Wants to be a Millionaire?”

“I was trying to convey things in a manner that people would be receptive to,” Kato says of his tactic. “Ultimately, the message has got to relate to the recipient, and if they’re not interested in it, even when it comes to their own 401(k), they’re not that engaged, and engagement is really important.”

Kato and Pacific Service Credit Union do as much as they can to make their retirement benefits engaging (and get their employees headed toward millionaire status) by providing a strong offering. That includes attributes such as a 3% non-elective safe harbor contribution and the plan committee working to bring target-date-fund fees from 47 basis points, or 0.47%, down to 9 bps, or 0.09%, per dollar invested.

In addition to a strong plan, the senior leadership team at Concord, California-based Pacific Service Credit Union leans into communication and education about the importance of taking advantage of retirement benefits. That has led to a participation rate of 94% to 96% since 2018 and an average deferral rate of 7.8% to 9.2%, according to the firm.

During the company’s quarterly updates, Kato says he often takes some of his allotted time to give a 401(k) update. He is quick to note that the leadership team is equally focused on the retirement plan, and the company demonstrates its commitment to employees by making the plan a key part of its compensation package.

The credit union’s plan committee meets quarterly to keep the benefits front of mind and to make changes such as the recent fee reductions to its TDF series, as well as a reduction of recordkeeping fees from 38 bps, or 0.38%, to 11 bps, or 0.11%.

“We recognize that 401(k) plans can easily get lost in the noise,” Kato says. “We want our employees to retire, and we want to make sure that we are giving them as much opportunity and information as possible.”

Kato recalls one session in which he was talking about catch-up contributions with employees. He remembers one staff member coming up to him and noting that they had not known about the option but thought they could contribute. The information ended up making a difference in that person’s retirement security.

Thanks in part to Kato, moments like that happen on a regular basis, says Barbara Smith, the company’s chief administrative officer. It’s also done through one-on-one meetings set up for employees through the firm’s financial wellness provider, NFP. Smith says the one-on-ones can be done through Zoom, phone calls or at the office with a financial professional.

“It’s considered work time, so we make it super easy and super convenient for our employees to have that one-on-one time with an expert outside of the organization to talk through their investment options,” she says.

Meanwhile, Kato will be thinking up his next creative 401(k) presentation for staff meetings.

“I’m very passionate about this,” Kato says. “Some people look at it from the perspective of, ‘I live to work,’ and others look at it from the view of, ‘I work to live.’ … From my perspective, it’s all about life. Work is supposed to support your life and what you want to do in your life, and hopefully post-work as well.”

—Alex Ortolani