Central Bank

For Central Bank to maintain a participation rate of more than 90% for the past several years and keep employee turnover in the single digits, Shelby John Enderwitz, executive vice president of human resources at Central Bank, attributes this success to “offering the whole package.”

“The bank has a really strong culture of ‘employees first,’” she says of the institution, Houston’s longest-serving independent bank, boasting four branches besides its main location. “Employees are as important as clients—sometimes even more so.”

Automatically enrolling new hires—and at an 8% default deferral rate—contributes significantly to Central Bank’s high participation and deferral averages, Enderwitz says. Participants are also 100% vested in the plan from day one, which, she says, makes the plan even more attractive.

Because retirement experts advise that workers save from 12% to 15% of their income each year for retirement, Enderwitz says, her team’s thought process behind matching 50% of up to an 8% deferral was that, if the company provides 4% and employees contribute 8%, that means 12% of the dollar amount they make goes to their retirement savings.

Enderwitz has found that most employees will not opt out when automatically enrolled. “Out of our around 150 employees, we have fewer than a handful of people who don’t participate in the plan,” she notes. Nor do people typically change their rate from the default rate, but maintain that rate throughout their employment.

Participants deferring 8% or more are, additionally, eligible to get a true-up match—an end-of-year contribution to the person’s 401(k) account to ensure receipt of the full employer match if they had not already received the full 4% of salary. “Perhaps [an employee] maxed out on [her] contributions [up to the IRS limit]earlier in the year and now she’s no longer [making contributions or] getting the company match,” Enderwitz says. “When she contributes, she can still get [the true-up], and that’s open to anyone in the company.”

Both highly and non-highly compensated employees may receive the true-up, and, Enderwitz says, for the 2023 plan year, Central Bank made contributions of almost $65,000 to all participants who were owed that employer provision.

Enderwitz says the company puts a lot of emphasis on financial wellness education and provides employees with a strong financial wellness plan that includes webinars, educational materials and free one-on-one financial planning sessions with an adviser. “Our cultural philosophy is to take care of our employees and they will take care of us,” she says. “We look at it not just as 150 employees, but 150 families that we are responsible for.”

Looking ahead, Enderwitz says, her team is excited about offering some of the optional provisions that were outlined in the SECURE [Setting Every Community Up for Retirement Enhancement] 2.0 Act of 2022. For example, as of May 1, Central Bank is enabling hardship withdrawals for domestic abuse victims. Later in the year, she says, the company also plans to add the emergency withdrawal option, letting employees take as much as $1,000 a year from their retirement account for emergency expenses.

“We do a lot of education to help participants understand why they should want to look at their 401(k) as one of their last resorts for withdrawals,” Enderwitz says. “But we understand that life happens, … and, at the end of the day, we want to take care of the participants and given them access to their money.”

—Remy Samuels