Employee education boosts 401(k) participation at Brady Corp.

Due to changes made in late 2009, Milwaukee-based Brady Corp. was able to make significant gains in the number of employees making full utilization of its 401(k) program and other retirement programs.

In late 2009, Brady Corp. asked Pewaukee-based Francis Investment Counsel LLC to provide as employee investment education and investment advice. A law change in 2009 allowed Brady Corp. to expand its employee education program, said Gary Vose, compensation, benefits and HRIS director.

“In the past, companies were not allowed to give any (investment) advice,” he said. “When the law changed to allow companies to contract for that service, we had the discussion with Francis. They have no financial interest whatsoever – they’re totally unbiased. And because of the longstanding relationship they were familiar with the funds.”

Francis Investment Council sent informational packets to Brady Corp.’s employees, which were followed by small group meetings at the company’s Milwaukee facility. During those meetings, employees were offered one-on-one meetings with Francis Investment employees, where they could receive individual recommendations.

“At the Milwaukee facility, they had eight different meetings with 10 to 30 people each, where they would talk about the general concepts of asset allocation and getting the largest (employer) match possible,” Vose said.

Brady Corp. has 2,561 employees participating in its 401(k) program and 2,036 of those workers were enrolled in the advice program in the first quarter of 2010.

Employees were able to schedule one-on-one meetings during the day, before or after work at the company’s facility, making it easy for them to access individual recommendations.

“We allowed them to schedule onsite meetings or Francis also allows you to call in (for phone-based advice),” Vose said. “We’re also looking at allowing them to do a webinar where employees can look at their actual allocation and what their contributions are.”

The one-on-one meetings have been most effective because employees have been able to make decisions and take action with Francis Investment Council right away.

“We found it to be very effective,” Vose said. “They can make decisions and changes on the fly and get it done all in one step.”

After the meetings and individual counseling sessions held in early 2010, the number of Brady Corp. employees who were not maximizing the employer match to their 401(k) accounts was reduced from 1,491 in 2009 to 1,155 by the end of 2010.

“(Brady) has a very generous plan. We do a 100 percent match on the first three percent and 50 percent on the next two percent,” Vose said. “(We wanted to encourage employees to take advantage of the full match) to do a better job of planning for retirement.”

Participation in the offered Roth 401(k) accounts increased from 127 employees in 2009 to 234 in 2010.

Asset allocation made significant gains after the employee education program. The average number of funds for participants rose from 3.2 to 6.1 in the matched fund category and from 3 to 6.2 in the funded category.

Brady Corp. is continuing to look at its employee education program and is looking at additional changes for this year, Vose said.

“We’re looking at how to encourage even more employees to do it,” he said. “Part of it is a marketing effort, coming back to people with reminder notifications and to give them a chance to have one-on-one sessions.”

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