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Questions about automatic enrollment?

Hendrick Medical Center has served its patients in Abilene, Texas, for more than 85 years. From its early beginnings, the Hendrick system includes a 504-bed medical center, a women’s center, rehabilitation hospital, cancer center and other innovative services.

Affiliated with the Baptist General Convention of Texas, Hendrick employs almost 2,600 staff members. Hendrick’s employees are eligible to participate in a retirement plan provided by GuideStone Financial Resources. It began automatic enrollment of its employees in the hospital’s retirement plan in 2010.

Mike J. McBroom, FACHE, vice president, shared his experiences as one of GuideStone’s first clients to begin offering automatic enrollment.

What prompted you to begin considering offering automatic enrollment for your employees?

In talking with our GuideStone representative, we discovered that our annual participation rate was much lower than the average rate of most healthcare organizations. We decided to focus on increasing our rate and added this to our strategic human resource goals.

What kind of hurdles (procedurally, culturally, financially) did you have to overcome to make automatic enrollment a reality
for your employees?

We haven’t experienced any major hurdles and with the help of the qualified staff at GuideStone this process was relatively easy. We delayed implementation for six months and started the program at the beginning of the calendar year. We did this so people could opt out of the program if they elected to do so.

Automatic enrollment obviously causes an increase in cost for the employer when the employer offers a match. What made you decide that the cost was worth it?

Our CEO, Tim Lancaster, and our Board of Trustees have always challenged us to offer the best programs for our employees and encouraged savings for retirement. Just like other salary and benefit enhancements, this was viewed as a continued investment in the people of our organization.

What percentage of your employees participated in the plan before auto-enrollment? After?

Prior to auto-enrollment we had around 50% participation. Ten years ago we averaged around 35 to 40%. After implementation of auto-enrollment we have maintained a 98% participation rate.

We know not all employees participate in a plan when they have to opt in: What was the response of employees when you began automatic enrollment? What has the opt-out rate been? And has it been limited to a certain classification of employees (i.e., Is maintenance staff more likely to opt-out than administrative support, or nursing?)

The overall response to the program has been very positive. We have had less than 1% opt out. The individuals who decided to opt out came from an array of positions. Salary level was not an indicator of who wanted to drop out of the program.

What kind of pre-education did you provide your employees about how automatic enrollment would impact them? Do you provide ongoing education for your employees about the retirement plan offered through GuideStone?

Pre-education of your employees is extremely important to the success of implementing this type of program. The professional support from GuideStone, both their people and literature, was excellent. They really worked hard to help us make a successful transition. We do provide ongoing education for our employees about the retirement plan.

Has automatic enrollment been a success, by your definition?

We have been very pleased with the overall success.

Many employers have looked at automatic enrollment, but may not be sure whether it’s right for them. What would you say to an employer sitting on the fence about offering automatic enrollment?

It’s simply the right thing to do.

If you'd like to learn how your employees could benefit from an automatic enrollment program, please contact us.

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