Helping Workers Build Futures

Hope you enjoyed your two-holiday work week, which began Monday with Labor Day and ended Friday with 401(k) Day. Yes, 401(k) Day, evidence that there is officially a holiday for everything now, including this common workplace retirement plan.

Devised nine years ago by the Profit Sharing/401(k) Council of America (PSCA), a nonprofit membership group for companies with 401(k) plans, the day is meant to remind workers to save for retirement through their employer-sponsored plan. It also encourages employers to make the time to further educate employees about the benefit.

Too often, human resources departments dump an overwhelming stack of benefits folders, including retirement plan info, in front of new hires, and leave it up to the employee to wade through it all, said Connie Mullis, a spokeswoman for the PSCA. No wonder the median 401(k) balance is about $54,000, far less than needed to scrape by in retirement.

The PSCA creates retirement-themed crossword puzzles, calculators and other resources for companies to use to educate their workers. While many companies simply download materials straight from and leave it at that, there are a few that go much further.

Take M.A. Mortenson, the Minneapolis-based construction company with more than 2,000 employees nationwide. It is the only company Mullis can think of that expands the concept of 401(k) Day into a month-long event. Despite the PSCA's 401(k)-themed superhero, Mortenson's manager of retirement benefits, Annette Grabow, chose to create the company's own mascot.

Complete with hardhat, tool belt and megaphone, Guy Savingston is a bobblehead doll modeled after a construction site superintendent. "We needed somebody who would make this project happen," Grabow said.

Guy Savingston is based on Ty Pennington, the ruggedly handsome host of the TV show "Extreme Makeover: Home Edition." Each year, Grabow brainstorms with staff members to come up with a construction-related 401(k) Day theme. This year it's "Extreme Financial Makeover: Mortenson Edition."

Employees who attend a financial education session are entered in a raffle to win the bobbleheads and other prizes. But the most valuable prize is definitely the knowledge they'll take away, and hopefully a more secure financial future as a result.

Since starting 401(k) month in 2001, participation rates among M.A. Mortenson's nonunion construction workers, a notoriously tough group to reach, have skyrocketed from 20 percent to 71 percent.

While participation by engineers and others in the office hasn't changed, hovering around an above-average 80 percent, the amount they're contributing to the plan, as well as their mix of investments, has.

Salaried employees now save an average 9 percent of their pay into a 401(k), about 3 percentage points higher than the typical contribution rate, according to the Center for Retirement Research at Boston College.

Grabow boasts that employees today have model portfolios because of a seminar that taught employees about risk tolerance and asset allocation. All attendees changed their investment mix that year, reducing their cash holdings and increasing the amount invested in stock mutual funds. Numerous studies have shown that workers rarely, if ever, make investment changes.

This month the company is introducing a seminar that addresses wills, life insurance and other financial topics having nothing to do with the company benefits.

Why would M.A. Mortenson care about whether an employee is financially secure? Grabow admits it's partially about the company's bottom line. "If people are stressed out about their home financial life, they're not as productive," she said. Good benefits also retain employees, and hiring is expensive. But it's clear from the time and thought put into the 401(k) month themes and activities that it's much more than the bottom line that drives Grabow and her team. "We also do it because it's the right thing to do for our employees," she said.

I hope other companies will step up and do the right thing. With workers in many industries facing stagnating wages and broken pension promises, educating employees about how to take care of themselves is the least companies can do.

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