The Johns Hopkins University Applied Physics Laboratory

The researchers at the Johns Hopkins Applied Physics Laboratory in Laurel, Maryland, are used to finding solutions to big problems related to national security, defense or space exploration. One problem that most of its staff can worry less about: running out of money in retirement.

With more than 98% of eligible employees participating, the university-affiliated research center’s comprehensive retirement program boasts an impressive average participant saving rate of over 20%, thanks to an average deferral rate of 10.3%, a generous contribution, plus a nonelective employer contribution of 10.5%.

“Knowing that a successful retirement does require a contribution of at least 15%, we want to try to make it as easy as possible for our staff to participate,” says Kristine Frohman, head of the talent services department at APL. “We have a pension committee and leadership structure in place that’s very committed to the financial well-being of our employees.”

APL attributes its high participation and contribution rates to its strong plan design, which includes automatic enrollment, and a well-structured participant engagement strategy. The plan auto-enrolls APL staff members at a 4% deferral rate and performs an annual re-enrollment sweep for nonparticipants.

“If someone is on the fence about the lab’s match, we make it very difficult for them to see the downsides,” says Alan Ashley, APL’s retirement plans manager.

The result: 99% of participants take full advantage of the 8% matching opportunity.

APL’s fully vested 403(b) plan includes a variety of investment options, including target-date funds and a mix of active and index funds, as well as a full suite of flexible advice solutions to help participants make decisions with clarity and confidence. Over 77% of participants exceed their optimal savings rate—more than double the average, according to plan provider Vanguard.

The plan has also fully embraced making Roth options available to employees and has educated them on the feature; that has led to 42% of participants putting some of their workplace retirement savings into a Roth. Participants may make Roth contributions or use in-plan Roth conversion features on existing balances or on prospective after-tax contributions.

“[APL] always considers new and effective ways to help participants prepare for retirement,” says Matt Brancato, chief client officer in Vanguard’s institutional division. “Roth options within the plan are no exception. Encouraging the use of Roth and after-tax dollars with a Roth conversion feature allows the plan’s participants to save even more for retirement, setting them up for long-term success.”

Ashley says he recently had a conversation with an early retiree who told him that the opportunity for a streamlined mega backdoor Roth conversion enabled him to retire in his mid-50s, several years earlier than he otherwise could have. Still, Ashley recognizes that such an option may not make sense for all employees.

“One of our guiding lights is providing enough educational material and in-depth seminars that our staff can make informed decisions about these great opportunities without having to spend the time to become experts themselves,” he says.

—Beth Braverman