When Jodi Budnick joined Optanix in January of this year as the company’s senior vice president of talent, she encountered a big problem: The company was struggling to attract and retain talent.
So one of the first things she did in her new role for the New York-based technology company was meet with employees to get a better understanding of who they are, what they do, the culture of the company and what they are looking for.
A recurring theme that kept cropping up in numerous one-on-one sessions and focus groups: Employees were unhappy with the company’s 401(k) plan. It didn’t provide a company match, and its employee participation rate was only between 35% and 40%, according to Budnick.
“We did not have a very progressive plan,” says Budnick, EBN’s 2018 Benefits Leadership in Retirement winner. “My key takeaway from this is we [needed to] slowly evolve it to become a program that incents employees to save more for retirement and help them to improve their retirement readiness.”
After completing a competitive analysis, Budnick created a proposal for the company’s leadership, backed up with lots of data, about the benefits of having a strong retirement plan. Leadership approved, and a new plan was born.
The company’s new retirement program, which is rolling out Jan. 1, is expected to double employee participation in the plan, in large part because it offers automatic enrollment to all new hires and automatic re-enrollment to all of the company’s 325 employees. It is also implementing a 50-cents-on-the-dollar company matching contribution up to 6% of pay as an added incentive with a two-year vesting schedule.
Budnick adds that one of the company’s fiduciary responsibilities is to “help employees be prepared for retirement, whether they want to or not, or whether they know that or not. That is one of our responsibilities.”
It’s a good time to reimagine the plan, Budnick says. Though Optanix has been around for 18 years, it was bought out several years ago by a private equity firm, Francisco Partners.
“We have a renewed strategy and a new leadership team, so while we’ve been around 18 years, we are kind of like a startup,” says Budnick, whose company provides an IT operations management software platform and related services to some of the world’s top banks, media and technology companies.
Arielle Sobel, senior public relations manager at Betterment for Business, the company’s 401(k) provider, says that Budnick and her team at Optanix wanted their employees to receive on-demand digital advice to bolster financial wellness in the workplace.
“Jodi and her team recognize that Optanix’s 401(k) plan is an integral part of their employees’ overall financial wellness,” Sobel says. “Jodi is laser-focused on bringing the best possible retirement advice and planning tools to Optanix and carefully selecting 401(k) plan features that will set employees up for success.”
In addition to the more robust 401(k) plan, Optanix will introduce a financial wellness education program for employees beginning in the fall.
“Jodi’s willingness to think critically about Optanix’s retirement plan offering and consistently do what’s best for her organization is just one example of her leadership in the benefits space,” Sobel says.
Betting on benefits
Budnick says that the one important thing human resources professionals should keep in mind when assessing their own benefits packages is that changes don’t happen overnight. You have to continuously build upon what you already have.
Optanix is scrutinizing all of its benefits to see what is working and what isn’t, but it made its 401(k) plan a priority this year.
“It is a large financial investment, a large cost for our company, but we felt it was absolutely necessary,” Budnick says, adding that she also is looking at the company’s healthcare benefits to see if they can enhance what is already offered.
Because Optanix is a technology company itself, it made sense for it to choose a company like Betterment to provide its 401(k) plan. The company’s system is entirely automated, and every employee retirement account is essentially a managed account. Only the rebalancing and tweaking of accounts is done by the computer.
Employees have been very receptive to the changes that are coming to their retirement plans at the beginning of the year, Budnick says.
“We communicated it in a town hall a couple of months ago, and they had a very positive reaction,” she says. “I think, for me, the important piece is they felt heard. They felt like we listened to them because we are listening to them.”
She adds that once a new program is implemented, a company has to continually keep an eye on it to make sure it is doing what it was meant to do.
“You don’t just launch a program and let it sit,” Budnick says.
Sobel says that of the 374 active and eligible employees in Optanix’s 401(k) plan, 128 of them have a savings rate of 5% of compensation or more. The average tenure of employees who have contributed to the plan is 7.1 years, vs. 4.6 years for those who do not contribute.
“With the introduction of the automatic enrollment and re-enrollment plan provisions, nearly all employees will be saving toward retirement as well as receiving employer matching contributions,” Sobel says. “Additionally, it’s projected that the number of employees investing at appropriate risk levels will more than double as a result of the personalized advice provided by Betterment for each employee.”