Maine Employers’ Mutual Insurance Company

Maine Employers’ Mutual Insurance Company, headquartered in Portland, Maine, sells workers’ compensation insurance through independent insurance agents in 45 states. To provide for its own employees, one benefit is the 401(k) plan, and 702 participate.

The plan features a generous employer contribution totaling up to 16.8%. This is composed of a 5% one-to-one matching contribution, 5.8% profit-sharing and a 6% discretionary nonelective contribution. Employees need to contribute just 5% of their income to effectively save 21.8% toward their retirement.

Michelle Allen, senior vice president and chief human resources officer, says the profit-sharing is based on a performance threshold, and “we have never not contributed it.” The nonelective 6% “is a flat amount distributed among all plan participants. [It’s] important to invest in retirement stability for our employees,” Allen stresses.

The plan automatically enrolls participants at 1%, then escalates their deferrals by 1% a year up to 5%, says Kristen Wintle, director of payroll and benefits. Participants may opt out or elect a different deferral rate. Adopting the automatic features increased plan participation from 88% to 99%, where it stands now, Wintle says.

The plan also values customizability and has added managed accounts and environmental, social and governance funds to the investment menu, Allen says. The managed accounts help participants ensure their “fund allocations are more diversified,” and this “is worth the couple of basis points it adds to the expense,” she says. ESG too “is important from a diversification perspective” and has been popular with the plan’s participants, she notes.

In terms of supplementary features, the plan offers tuition reimbursement and help with student debt repayment. Employees are reimbursed in cash, up to the IRS limit, for tuition in pursuit of a degree, Allen says. Plus the plan pays $100 a month direct to the loan servicer toward their student debt, up to $3,600 over the course of their employment.

Employee education is important to the company. Notably, it takes care that participants understand the plan and its features, Wintle says. A “point-in-time webinar offering” provides financial information tailored to the person’s age, with the early-career programming focused on topics such as budgeting and student loans, and late-career on Social Security and Medicare. Wintle says these materials have been “very well-received by employees.”

The sponsor additionally brings in representatives from a local public agency on aging to help pre-retirees budget their retirement savings, a task that, Wintle says, “can be very daunting for people.”

—Paul Mulholland