How Harry Rosen improved pension plan outcomes
Conrad Frejlich, executive vice-president and chief financial officer, Harry Rosen

Before 2014, Harry Rosen Inc. frequently held DC plan education sessions, but these were not mandatory and therefore not well attended by employees. Also, employees didn’t maximize contributions to take advantage of the company match. The men’s clothing retailer knew it needed to do something.

It responded to the low uptake rate by reducing the enrollment waiting period from two years to one and increasing the employer’s contributions. Enrollment is now mandatory for any part-time (defined as working more than 24 hours a week) or full-time employee: new plan members are automatically enrolled in a default investment option.

New Communication Methods

The company tried various ways to tell employees about 2014’s education sessions. Methods ranged from emails and tent cards on tables in staff areas to posters that were customized to Harry Rosen’s look and feel.

And, at the stores’ weekly morning meetings on Saturdays, where there are discussions about new products for sale, managers also mentioned the pension plan and upcoming retirement seminar.

What Also Changed

The voluntary sessions used to be targeted at certain age groups or new plan members. But in 2014, sessions were made mandatory for all employees who were contributing less than the maximum 5% “because they were leaving money on the table,” says Conrad Frejlich, executive vice-president and chief financial officer at Harry Rosen. Those contributing the maximum were allowed to attend as well, but were not required to do so.

The company decided to hold a one-hour session at each store in early spring, when its stores weren’t as busy. Management, including Frejlich, and Harry Rosen’s consultant, Accompass, introduced and closed the sessions by talking about the benefits of the program and encouraging attendees to increase their contributions.

A representative from the plan sponsor (Manulife, in this case) made presentations in French for its Quebec employees and in English. The plan provider also brought interpreters to sessions for employees who don’t speak either official language very well (e.g., many of Harry Rosen’s tailors were born and raised in Italy).


Participation rate for voluntary Canadian DC plans

Source: 2014 CAP Benchmark Report (sponsored by Great-West Life and managed by Rogers Publishing)

Employees also were given an updated personalized statement and an annual review workbook in English or French for their retirement savings plan. The retailer also provided staff with an all-in-one form they could fill out to increase contributions, make any changes to their investments and change or add a beneficiary. In the past, workers had had to fill out different forms for each and call HR to make any changes. Since many employees had been automatically enrolled, it was possible they might not have been provided with some of this information.

The session presenter talked about the various investment options, the sources of retirement income the employees can expect from the government, their pension and individual savings, and how to read their statements. Frejlich believes some employees don’t actually open their statements.

The retailer also gave staff the chance to win an iPad. Employees would earn one ballot for attending the session, one for completing the form and one more for going online to update their personal planning tool.

While the company didn’t set a goal for how many employees would make a change either to their contribution level or to their investments, nearly 50% did so.

“Typically, after group communication sessions in the past, there would be really no action,” Frejlich says. About 5% of employees who attended past sessions chose a different investment option or increased their contributions.

Even for a few weeks after the seminar, Frejlich says associates talked to their co-workers about the plan and some asked why they didn’t increase their contributions. And some actually gave in to peer pressure. “People down the road made their changes,” he explains. “It was quite successful.”


Percentage of Canadian DC plan participants receiving the maximum company match

Source: 2014 CAP Benchmark Report (sponsored by Great-West Life and managed by Rogers Publishing)

He says a number of factors led to improvements in plan outcomes: making sessions mandatory, increasing awareness through various communications methods, getting senior executives to speak at all the sessions, having an annual review workbook for employees and providing employees with just one form to make any changes.

“The other point I learned is that being in front of the employees instead of just emailing them or sending them documents, we made a huge difference,” he says. “They tend not to read these.”

But there are still issues with younger generations in the company’s workforce and getting them interested and familiar with the plan.

“It’s like insurance. The pension is an afterthought,” he says. “They just live for today. It’s a challenge.”

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