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Case Study: Stuck at 2%

Executives at PinnacleHealth in Pennsylvania noticed that participants were headed toward insufficient income in retirement. reported that PinnacleHealth had implemented automatic enrollment in 2007 with a default deferral rate of 2%. Analysis revealed that many participants remained at the 2% rate and were not increasing their retirement savings.

Full employer match not utilized

PinnacleHealth offers a 50% match of the first 6% of participant contributions. After five years of service, the match rate rises to 67% of the first 6% of deferrals.

Participants at the 2% default rate were missing significant matching dollars.

First step: reenrollment

The employer decided to conduct a reenrollment as the first step in a campaign to encourage employees to save more for retirement. The reenrollment was completed at the end of 2013 and was a success. Before the reenrollment, 355 employees were not contributing to the plan. Only 79 were still not participating after this step was taken.

Executives reported no problems with or complaints about the reenrollment.

At the same time, PinnacleHealth put in place an automatic contribution rate increase feature, in which hundreds of employees enrolled.

Updated website introduced

PinnacleHealth also updated and rebranded its website for participants. It was made easier to use in getting information about the retirement plans, and it permits employees and participants to perform transactions, such as enrolling, increasing contributions and designating beneficiaries. The modernized website also contains current, relevant and frequently updated educational information.

The end result is that the action steps taken by management resulted in significantly renewed employee interest in the retirement plans. Also, the revitalized plans are more focused on reaching PinnacleHealth’s goal: “to help employees retire with dignity.”

Details are at

For plan sponsor use only, not for use with participants or the general public. This information is not intended as authoritative guidance or tax or legal advice. You should consult with your attorney or tax advisor for guidance on your specific situation.

Kmotion, Inc., P.O. Box 1456, Tualatin, OR 97062; 877-306-5055;

© 2014 Kmotion, Inc. This newsletter is a publication of Kmotion, Inc., whose role is solely that of publisher. The articles and opinions in this publication are for general information only and are not intended to provide tax or legal advice or recommendations for any particular situation or type of retirement plan. Nothing in this publication should be construed as legal or tax guidance; nor as the sole authority on any regulation, law or ruling as it applies to a specific plan or situation. Plan sponsors should consult the plan’s legal counsel or tax advisor for advice regarding plan-specific issues.