Averitt Express Successfully Integrates Plan Design with Participant Communications and Education

How their approach increased plan participation rate and is helping associates to better retirement

Averitt Express is a Tennessee-based provider of freight transportation and supply chain management with international reach to more than 100 countries. The company specializes in delivering customized solutions with a single source of accountability for services that include less-than-truckload, truckload, time-critical, importing/ exporting, and supply chain management. Averitt Express has been delivering goods since 1958 and it continues to develop innovative ideas to help its customers grow. 

Similar to the recognition Averitt Express has earned in the marketplace, it also wants to continue recruiting the best of the best, providing competitive retirement plan benefits. The company offers its associates a 401(k) plan, in addition to providing all of them with a profit sharing contribution. 

Challenges
A majority of Averitt Express’ associates are part of a mobile workforce — they are on the road for much of the work week and have limited access to personal mail and the Internet. The company has always put a great deal of emphasis on communicating with its associates, but despite these efforts, it had been difficult to increase plan participation and ensure that associates had the investment information they needed to make informed decisions about their retirement savings. 

Another challenge the company faced was trying to change the mindset of their associates. A significant portion of the associate base felt they were already saving enough for retirement because they received a profit sharing contribution. Averitt Express knew it was important to educate them about the necessity of making their own plan contributions to ensure a comfortable retirement. 

The company recognized that traditional methods of participant communication and education alone might not be enough to reach their associates, so it began exploring plan design options.

Easy Enroll
Looking for ideas to increase its 401(k) participation rate of 32 percent, in 2005 the company worked with its service provider, Wells Fargo Institutional Trust Services, to implement Easy Enroll — a simple way for associates to enroll in the plan on-the-spot by completing an Easy Enroll form. 

“We wanted to try something new that would make it easy for associates to enroll in the plan, and this seemed like an attractive solution,” said Jeff Garrett, Marketing and Communications Leader for Averitt Express. “Easy Enroll was a trend increasing in popularity and plan sponsors that had already used it were highly satisfied with the results.” 

As part of an overall communications and education program, a direct mail piece with the theme, “What will you be driving in retirement?” was mailed to associates’ homes. The mailer included photos of an airplane, motorcycle, boat, and golf cart to help associates picture their lives in retirement. It included a tear-off form which associates could use to enroll directly through the mail. On-site education sessions were also held at locations with the highest number of associates and the lowest participation rates. The meetings were mandatory and invitations were sent to eligible, non-participants associates. The meetings were also promoted through company newsletters, emails, posters, and by Averitt Express managers. Easy Enroll forms were discussed at the meetings to try to get more associates to take action and sign up for the plan. 

As a result of Easy Enroll, Averitt Express saw a 10 percent jump in its 401(k) plan participation rate to 42 percent. Of the associates that attended the on-site meetings, 55 percent of them enrolled in the plan at an average deferral rate of 5.3 percent.

Automatic Enrollment
Although quite satisfied with the results from Easy Enroll, Averitt Express knew there was still room to further improve its participation rate. In 2006 the company set its sights on automatic enrollment, another plan feature with soaring adoption rates. The company’s one concern with implementing automatic enrollment was that associates would feel like they were being forced to contribute to the plan and possibly have a negative reaction to the change. 

An extensive communications and education program was designed to help associates understand why the plan feature was put in place and to reinforce the importance and benefits of making contributions now. It also let associates know they could make changes or opt out of automatic enrollment. Additionally, associates were encouraged to increase their deferral above the 2 percent automatic enrollment default rate and to enroll immediately rather than wait for auto enrollment. 

“We’ve always taken a very thoughtful approach when designing and implementing participant communications,” said Garrett. “We wanted to find the most effective way to structure an automatic enrollment program that would work for our associates and optimize results.” 

Averitt Express piloted its automatic enrollment program with four test groups — two in Tennessee and two in Texas. Associates within these test groups were eligible, non-participants and new hires. Those who did not opt out of automatic enrollment would enter the plan at a 2 percent deferral rate and would default into an asset allocation fund. These associates received postcards at home inviting them to the mandatory auto enrollment informational meetings. Payroll stuffers and posters were also used to promote the meetings and these pieces included information about the date, time, place, and meeting purpose. 

All of the communication materials were designed with a clean, simple look and feel, using the company’s signature color — red. The theme, “Wouldn’t it be nice if some things in life happened automatically for you?”, was carried throughout the pieces and photography featured things in life that people want to automate such as paying bills, losing weight and saving for retirement. The company’s “Journey to Retirement” insignia was also displayed on each piece, reminding associates that saving for retirement was a long-term commitment, not something they could take shortcuts with along the way. 

A Wells Fargo educator facilitated the on-site meetings. The educator discussed and demonstrated the many benefits of saving for retirement and provided a timeline of the automatic enrollment process, bilingual account access brochures (English and Spanish), bilingual retirement savings calculators (English and Spanish), and an investment option communication. 

At two of the locations, associates were required to access the Web site, voice response unit (VRU), or toll-free benefits helpline to take immediate action — either enroll, increase deferral rates (above the 2 percent default), or opt out. At the other two locations associates were asked to use forms to make the same elections, and the educator walked interested associates through the forms. 

The results of the pilot showed that fewer associates opted out when required to do so by accessing the Web site or benefits helpline. The paper-based change form was successful in getting associates to enroll at the meeting and to increase their deferral percentages. “We received little negative response about automatic enrollment from our four test sites,” said Garrett. “What’s more, we were able to gain valuable insight to help us roll the automatic enrollment program out to our remaining associates.”

Averitt Experiences Results  Easy Enroll boosted the company’s participation rate from 32% to 42%.  With automatic enrollment, Averitt’s participation rate almost doubled — from 42% to 80%.

Full Speed Ahead
Equipped with positive results, Averitt Express decided to fully roll out automatic enrollment in 2007 for the remainder of associates at its 80-plus locations. It implemented the same strategy that had proven successful in the test phase — all eligible, non-participants received postcards at home inviting them to mandatory meetings. Posters were displayed and statement inserts and company newsletter articles were distributed with the same on-site meeting information. Similar to the test sites, associates would be automatically enrolled in the plan at 2 percent deferral rate, and they would default into an asset allocation fund. 

Over the course of three months, meetings were held at each Averitt Express location and they were facilitated by either a Wells Fargo educator or an Averitt Express Benefits Manager. For some of the smaller locations, a video of the meeting was provided and played for the associates. Enrollment forms were made available so that associates could join the plan immediately. The “opt out” period for automatic enrollment was designated as March 27, 2007 to April 30, 2007. Associates were directed to either the Web site or benefits helpline to make this election. 

Averitt Express achieved impressive results with its automatic enrollment program. The company’s participation rate almost doubled, from 42 percent to 80 percent. Additionally, 45 percent of associates increased their deferral percentage above the default rate. 

Conclusion
With the advent of easy and automatic plan designs, Averitt Express discovered that creating participant communication and education that is relevant, engaging, targeted, and action-oriented is essential. 

“This approach helped drive us in the right direction, and now we’re open to exploring other options that might move us even further along,” said Mr. Garrett. 

Future plan design changes and communication objectives under consideration for Averitt Express include an automatic deferral increase program, target date funds as a default option, and personalized projection statements.