Community Health Systems, Inc.

The sponsor of the Community Health Systems Inc. Retirement Savings Plan is focused on developing a strategic plan to support the company’s employees as they navigate through challenging times.

Since the COVID-19 pandemic, a variety of factors have increased employee stress. For the health-care industry, high turnover and an employee base with student loan debt have compounded the challenges, observes James Carmody, vice president of human resources at the health-care system provider. So keeping in contact with employees is key.

“We operate 71 hospitals and about 40 clinics across the country, from Palmer, Alaska, to Key West, Florida, from Pennsylvania to Arizona,” he says. With such a far-flung workforce, along with company headquarters being in Franklin, Tennessee, communicating with employees is complicated, he says.

For hard-to-reach employees, CHS has used direct mail and email to the participant’s personal email address. “An average hospital employee is taking care of patients … so it’s important that we find other ways to get [these people’s] attention,” Carmody notes.

CHS worked to improve its plan metrics by building on the plan’s 8% default deferral rate, says Linda Mikolajczak, senior relationship director at the plan’s recordkeeper, Principal Financial Group. “[With] an 8% rate, and then the automatic escalation in 2% increments up to 12%, it’s fabulous, especially in the health-care sector—that sets employees off from the start with a really good path to retirement savings success.”

To help participants appreciate the value of the plan, the sponsor highlights it “as an advantage,” in recruitment and retention efforts.

“I don’t believe there’s a health-care organization in the country, no matter the location, or where services are provided, that doesn’t have challenges with retention—for all employees—from nurses to physical therapists to medical technologists, to environmental service people, you name it,” Carmody says. “So, retention is critical.”

As part of CHS’ retention efforts, the sponsor, in the past year, added financial advice capabilities that include point-in-time advice for saving and investing and a managed account service that offers account drawdown help.

“With Principal, we’ve engaged Edelman Financial Engines to help employees plan for retirement income but, as importantly, for retirement expenses,” Carmody says. As people enter retirement, after having saved throughout their career, helping them with how to draw down their nest egg prudently “is vitally important to everyone,” he says.

CHS’ efforts have resulted in a higher plan participation rate—going from 79% in 2020 to 83.8% last year. The average employee contribution rose from 7% to 8.3% over the same period.

The company also established a single-sign-on feature with insurance group ARAG to assist employees with preparation of wills and other documents. In addition, the health system implemented a 500-hours-of service requirement and a “last day requirement”—meaning all employees, except those who retired that year, must be employed on December 31—to receive the employer’s annual matching contribution, Carmody explains.

”We’ve changed the eligibility criteria in a few small ways that have allowed us to increase the match for employees who stay on, and that’s an important part of retention,” he says.

“By implementing a last-day requirement and hours of service requirement, CHS was able to raise the overall match level while staying within its match budget, a huge boost for attracting and retaining employees,” Carmody says.

—Noah Zuss