Driving Better Outcomes
WE ASKED SHANNON MALONEY for anecdotes about successful participant outcomes, and she more than delivered, ticking off a heartwarming and humorous list that left us thankful for her passion and professionalism.
“It’s what she finds most rewarding, sitting with workers who might not make much and work difficult hours putting in hard labor to get where they want.”
But first, the Managing Director, Michigan, with Strategic Retirement Partners and Desert Storm veteran began by noting her Employee Stock Ownership Plan (ESOP) expertise and solid retirement plan metrics.
“We do a lot with ESOPs because they operate very differently than 401(k)s,” Maloney explained. “Communication is the sponsor’s responsibility, not the recordkeepers or advisors, so ESOPs are more fun, especially with gamification, which we’ve done since 2012.”
Fun and effective, something her results demonstrate. After working with a plan for roughly three years, she’ll see an average deferral rate of 9% (“or way higher”) with participation rates over 90%.
“We’re fortunate that we see a real connection between what we talk about with employees, what they retain, and then items that drive them to take action,” she added.
It fits with her anecdotes that involve trucking companies, which are a good portion of her client base.
“People might downplay truckers’ financial acumen, but they listen to the financial news in their cab 24/7. They have some of the toughest questions you can imagine, but they don’t make very much.”
For this reason, Maloney and her team found success by measuring deferral increases by dollar amounts rather than percentages, and no one has ever opted out.
“One of the first times we had one of our truckers hit their goal, he just started crying,” she said with a smile. “He’s this big, burly guy. He never thought he would ever see that amount of savings. We were then able to say, ‘You have a lot more time before you need it, so we can keep it in the market.’ Yes, the market will fluctuate, but it will rise long-term.’ We’ve developed that trust with him over time, and he stayed invested.”
It’s what she finds most rewarding, sitting with workers who might not make much and work difficult hours putting in hard labor to get where they want. They understand that they’re sacrificing and saving, so they receive a paycheck in retirement.
It’s paying off. The average employee account balance is $70,000, compared with $40,000 in 2016, a 72% increase. The average deferral increased to $2,400 from $2,200, which Maloney said is almost the company match. The participation rate moved from 67% to 78%. Notably, they also reduced their high number of outstanding loans to just one.
“We keep these metrics for our clients for five years so they can see whether or not we’re making an impact,” she noted. “Sometimes it’s hard to see one year to one year and doesn’t seem like a big jump. But when you compare multiple years, you can see the difference we’re having. Because we care, we’re going to make an impact.”
That kind of trust and relationship-building is reflected in one-on-one meetings and no sign-up times are left unfilled.
“One guy was in a meeting with me for about 45 minutes,” Maloney concluded. “The plan sponsor came in amazed and said, ‘He doesn’t talk to anybody.’ I’ve been meeting with him for five years. Now he’s talking about his kids and what they do with their finances and planning.
Shannon Maloney is Managing Director, Michigan, and National Practice Leader for DB & ESOPs with Strategic Retirement Partners. She is also an Investment Advisor Representative with Global Retirement Partners.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
